US military commanders have warned their Israeli counterparts that any action against Iran would severely limit the ability of American forces in the region to mount their own operations against the Iranian nuclear programme by cutting off vital logistical support from Gulf Arab allies.

US naval, air and ground forces are dependent for bases, refuelling and supplies on Gulf Arab rulers who are deeply concerned about the progress Iran has made in its nuclear programme, but also about the rising challenge to their regimes posed by the Arab spring and the galvanising impact on popular unrest of an Israeli attack on Iran.

The US Fifth Fleet is headquarted in Bahrain and the US air force has major bases in Qatar, Kuwait, Bahrain, the United Arab Emirates and Oman. Senior US officers believe the one case in which they could not rely fully on those bases for military operations against Iranian installations would be if Israel acted first.

“The Gulf states’ one great fear is Iran going nuclear. The other is a regional war that would destabilise them,” said a source in the region. “They might support a massive war against Iran, but they know they are not going to get that, and they know a limited strike is not worth it, as it will not destroy the programme and only make Iran angrier.”

Israeli leaders had hinted they might take military action to set back the Iranian programme, but that threat receded in September when the prime minister, Binyamin Netanyahu, told the United Nations general assembly that Iran’s advances in uranium enrichment would only breach Israel’s “red line” in spring or summer next year.

Israel’s defence minister, Ehud Barak, said this week in London that it was the Iranian decision this year to convert a third of the country’s stock of 20%-enriched uranium into fuel (making it harder to convert to weapons grade material if Iran decided to make a weapon) that had bought another “eight to ten months”.

Barak’s comments, made in London, appear to signal that Israel’s new red line is an Iranian stockpile of about 200kg of 20%-enriched uranium in convertible form, enough if enriched further to make one bomb. Western diplomats argue the benchmark is arbitrary, as it would take Iran another few months to enrich the stockpile to 90% (weapons grade) purity, and then perhaps another year to develop a warhead small enough to put on a missile. Even then Tehran would have just one nuclear bomb, hardly enough to make it a nuclear weapons power.

France’s president, François Hollande, met Netanyahu in Paris on Wednesday but rejected the push for military action.

“It’s a threat that cannot be accepted by France,” Hollande said, arguing for further sanctions coupled with negotiations. A new round of international talks with Iran are due after the US presidential elections, in which Tehran is expected to be offered sanctions relief in return for an end to 20% enrichment.

Netanyahu argued sanctions had failed to stop the Iranian nuclear programme, and claimed Arab nations would be “relieved” if Iran was stopped from building nuclear weapons.

Emile Hokayem, a senior fellow of the International Institute for Strategic Studies office in Bahrain, disagreed, saying: “I don’t believe the Gulf states are praying for an Israeli attack.”

“An attack would create difficult problems for them on the political level. They will be called on to denounce Israel, and they will want to stay out of it. The risk of regional war to them is huge,” Hokayem said, but he added that if Iran responded to an Israeli attack by lashing out at the US and its Arab allies, those restraints on the Gulf states’ own response would be lifted.

The UK government has told the US it could not rely on the use of British bases in Ascension Island, Cyprus, and Diego Garcia for an assault on Iran as pre-emptive action would be illegal. The Arab Spring has also complicated US contingency planning for any new conflict in the Gulf. US naval commanders have watched with unease as the newly elected Egyptian president, Mohammad Morsi, has made overtures towards Iran. US ships make 200 transits a year through the Suez canal. Manama, the Fifth Fleet headquarters, is the capital of a country that is 70% Shia and currently in turmoil.

Ami Ayalon, a former chief of the Israeli navy and the country’s internal intelligence service, Shin Bet, argues Israel too cannot ignore the new Arab realities.

“We live in a new Middle East where the street has become stronger and the leaders are weaker,” Ayalon told the Guardian. “In order for Israel to face Iran we will have to form a coalition of relatively pragmatic regimes in the region, and the only way to create that coalition is to show progress on the Israel Palestinian track.”

SAN FRANCISCO — The Electronic Frontier Foundation said Wednesday it has sued the US Department of Homeland Security to obtain details about Predator drones on loan to domestic police departments.

EFF Internet freedom and privacy champions contended that they filed suit in federal court in San Francisco because the DHS failed to respond to a Freedom of Information Act request for the information.

A DHS division uses unmanned drones in the United States to patrol borders but reports indicate that missions are being flown on behalf of local and federal law enforcement agencies, according to the EFF.

“Drones are a powerful surveillance tool that can be used to gather extensive data about you and your activities,” said EFF Staff Attorney Jennifer Lynch.

“The public needs to know more about how and why these Predator drones are being used to watch US citizens.”

The EFF is also suing the US Federal Aviation Administration for the latest information about authorizations it has issued for public drone flights.

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Supreme Court debates constitutionality of drug-sniffing dogs

By Eric W. DolanWednesday, October 31, 2012 19:17 EDT

The Supreme Court on Wednesday heard two cases regarding the use of drug-sniffing dogs by law enforcement officials. The Supreme Court’s ruling, which is expected next June, could have long-ranging consequences for law enforcement.

The Florida Supreme Court ruled last year that using a drug-sniffing dog outside a home without first obtaining a search warrant was an “unreasonable government intrusion” of privacy. In a separate case, the Florida Supreme Court ruled that a drug-sniffing dog’s alert did not provide probable cause for a search if the state could not prove the dog was reliable.

The state of Florida appealed both decisions to the U.S. Supreme Court.

During oral arguments on Wednesday, attorney Gregory C. Garre said that a home’s interior was protected from searches by the Fourth Amendment, but that odors emitted from inside the house were not, according to McClatchy.

“You may have an expectation of privacy in the marijuana plants, but you don’t have an expectation of privacy in the odor, because you’re emitting it out into the world, and it’s the odor that was detected,” Roberts, who is representing Florida, said.

But the justices were skeptical. Justice Antonin Scalia noted that the odor would not have been detectable had the officer not took the dog onto the defendants front porch. However, in the second case, the justices were also skeptical that the state should have to prove that a drug-sniffing dog is reliable.

The attorneys general of 24 states have urged the Supreme Court to side with Florida. In an amici curiae brief, they argued that the use of a drug-sniffing dog did not constitute a search under the Fourth Amendment. Noting the prevalence of drug-sniffing dogs, the attorneys generals wrote that the Florida Supreme Court decisions “substantially undermin[d]” law enforcement efforts.

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October 31, 2012

An Unlikely Political Pair, United by a Disaster

By MARK LANDLER and MICHAEL BARBAROIHT

WASHINGTON — President Obama toured the storm-tossed boardwalks of New Jersey’s ravaged coastline on Wednesday, in a vivid display of big-government muscle and bipartisan harmony that confronted Mitt Romney with a vexing challenge just as he returned to the campaign trail in Florida.

The scene of Mr. Obama greeting his onetime political antagonist Gov. Chris Christie in Atlantic City was a striking departure from what has become an increasingly bitter campaign, marked by sharp divisions between Mr. Romney’s more limited view of the federal role and Mr. Obama’s more expansive vision. The president placed a hand on Mr. Christie’s back and guided him to Marine One, where the two men shared a grim flight over shattered sea walls, burning houses and a submerged roller coaster.

Speaking to storm victims at a community center in the hard-hit town of Brigantine, Mr. Obama said, “We are going to be here for the long haul.” Mr. Christie thanked the president for his visit, saying, “It’s really important to have the president of the United States acknowledge all the suffering that’s going on here in New Jersey.”

The tableau of bipartisan cooperation, and the Federal Emergency Management Agency’s highly visible role in the aftermath of Hurricane Sandy, has put Mr. Romney in an awkward position during the last week of a campaign in which he has fought Mr. Obama to a virtual draw. Last year, in a debate during the Republican primary, Mr. Romney appeared to advocate handing to the states much of the federal government’s role in dealing with major disasters.

On Wednesday, as images of Mr. Obama and Mr. Christie dominated the newscasts, Mr. Romney was in Florida, a key electoral battleground that is no stranger to destructive hurricanes, where he struggled to square his small-government credo with a national disaster that seemed to cry out for a major federal response.

Before taking the stage at his first rally in Tampa, Mr. Romney issued a statement pledging to continue financing FEMA to insure it can “fulfill its mission.”

“I believe that FEMA plays a key role in working with states and localities to prepare for and respond to natural disasters,” Mr. Romney said. But reaffirming his earlier point, he added that he would channel resources to “the first responders who work tirelessly to help those in need, because states and localities are in the best position to get aid to the individuals and communities affected by natural disasters.”

Aides to Mr. Romney reiterated that Mr. Romney was not backing away from comments he made at the debate in New Hampshire in June 2011. When asked about a fierce battle in Congress over continued financing of FEMA, Mr. Romney declared, “We cannot afford to do these things without jeopardizing the future for our kids.”

As the Romney campaign was confronting questions about the candidate’s position on the federal role in emergency response, Mr. Obama and Mr. Christie were being accompanied on their tour of a devastated New Jersey by FEMA’s administrator, W. Craig Fugate, whose agency has won unstinting praise from Mr. Christie, a Republican, for the speed and intensity of its response to the devastation.

Kevin Madden, a senior Romney adviser, said that Mr. Romney still believes that states, not the federal government, should lead the response to disasters. Pressed on FEMA’s proper role, he said that Mr. Romney believes “being a partner for the states is the best approach.”

Mr. Romney got some help from Jeb Bush, the former Florida governor, who said at the Romney rally in Tampa, “My experience in all this emergency response business is that it is the local level and the state level that really matters. That if they do their job right the federal government part works out pretty good.”

Mr. Romney has had to balance the demands of the campaign’s final week with the desire not to look unseemly in the face of the storm’s tragic toll. On Tuesday, in Ohio, he scrapped rallies in favor of a canned-goods drive. Though he returned to politics on Wednesday, he avoided attacks on the president, never mentioning his name.

“My view is pretty straightforward, and that is I believe that this is time for America to take a different course, that this should be a turning point for our country,” he told 2,500 people in Tampa.

Aides to Mr. Romney said that he had no immediate plans to visit areas damaged by the storm, though they had not ruled it out.

The disaster comes as the campaigns continue to clash, with the federal bailout of the auto industry — which Mr. Romney opposed — erupting again as a major issue as the candidates scramble to capture the swing state prize of Ohio.

Vice President Joseph R. Biden Jr., also in Florida, attacked Mr. Romney for his ad in Ohio that claims Mr. Obama forced Chrysler into bankruptcy, resulting in the carmaker’s sale to Italian owners, who are now building Jeeps in China.

Mr. Biden called it “one of the most flagrantly dishonest ads I can ever remember in my political career.” The ad is the centerpiece of a mounting war of words over the Obama administration’s bailout of the auto industry, which the Romney camp is trying to discredit, as it works to cut the president’s narrow but stubborn lead in Ohio.

The harsh words reflected the frantic maneuvering in both campaigns as the hours tick down. Both sides are projecting ironclad confidence that they will win, while trying to outwit each other with last-minute purchases of advertising time in states like Pennsylvania, Michigan and Minnesota, which lie outside the conventional battleground.

Aides to Mr. Obama said the Romney campaign’s purchases reflected a “flailing” attempt to win an electoral majority without Ohio, while Mr. Romney’s advisers said that tightening polls in those states showed Mr. Obama’s position was eroding everywhere.

On Thursday, Mr. Obama will return to the campaign trail in Wisconsin, Nevada and Ohio. But there is some initial evidence that the storm has helped the president: In the latest Washington Post-ABC News tracking poll, released on Wednesday evening, nearly 8 of 10 likely voters said Mr. Obama’s response had been “excellent” or “good.”

On Wednesday, the advantages of incumbency were on full display, as Mr. Christie heaped still more praise on Mr. Obama, saying, “He has sprung into action immediately.”

With Mr. Christie nodding behind him, Mr. Obama spoke about deploying C-130 military planes to ferry supplies to stricken places like New Jersey and urged storm victims to call (800) 621-FEMA to register for direct help from the federal government.

Pledging to respond swiftly, the president said that he had instituted a rule that government officials must return calls from the state and local authorities within 15 minutes. “We are not going to tolerate red tape,” he said, “We are not going to tolerate bureaucracy.”

Tens of thousands of homeowners who suffered wind and storm damage this week will get financial relief from rulings by several governors that insurers must treat Sandy as a tropical storm and not a hurricane.

Among those to benefit is Dana Spada, a school social worker who watched from the top floor of her apartment building in Long Beach, N.Y., as the ocean smashed through a concrete wall and flooded her second-floor studio condominium with four feet of water.

When she called her insurance company, she was told she might have to pay as little as a couple of thousand dollars or as much as 10 percent of her condo’s value, depending on whether the storm turned out to be officially a hurricane.

“Whether they call it a hurricane or something else, that translates into the percentage I have to pay to get my apartment redone,” she said before Gov. Andrew Cuomo announced Wednesday that homeowners would not have to pay hurricane deductibles. “I had no idea. It’s crazy, and it’s going to cost so much money.”

Homeowners’ insurance policies in coastal areas almost always include a provision that the deductible will be higher when damage is caused by a hurricane than a lesser windstorm. The difference can be steep — in the thousands of dollars — because the regular deductible is a flat dollar amount, while the hurricane deductible is connected to the replacement value of the house.

This storm was considered an unusually close call, as storms go, because it was designated a hurricane for much of the time it traveled up the Atlantic coast, and hurricane warnings — not storm warnings — were issued repeatedly. But then, as it was about to make landfall, it was reclassified as a “post tropical storm” by the National Weather Service. Even then, it displayed certain characteristics of a hurricane, leaving it up to state officials, who regulate insurance, to declare how the laws would be administered.

“Homeowners should not have to pay hurricane deductibles for damage caused by the storm,” Governor Cuomo said in a statement. “Insurers should understand the Department of Financial Services will be monitoring how claims are handled.”

The governor of Connecticut, Dannel Malloy, and the governor of New Jersey, Chris Christie, also said Wednesday that the lower deductibles would apply to homes in their states.

J. Robert Hunter of the Consumer Federation of America estimated that 100,000 policy holders could have suffered wind damage and most likely fall under the hurricane deductible ruling. He said he supported the move by the three states but held out the possibility of a challenge from the insurance industry.

“Normally, the governments are loath to take on the industry in a time like this,” Mr. Hunter said. “Normally, they get away with charging the hurricane deductible.”

Insurance industry officials said there were valid reasons for the peculiar-sounding cutoffs between different types of storms. Starting with Hurricane Andrew in 1992, homeowners’ insurers have seen their exposure to storm damage rise steadily, as more and more people and businesses have moved closer to shorelines, and property values have generally increased.

The insurers devised the categories as a way of forcing property owners to bear more of the risk of catastrophic storms, without raising overall premiums to unaffordable levels.

“It’s a risk-sharing mechanism,” said Kristina Baldwin, an assistant vice president of the Property Casualty Insurers Association of America, a trade group.

Ms. Baldwin said that if the industry had to factor the cost of hurricane claims directly into premiums, homeowners’ insurance would have become unaffordable in hurricane-prone areas. The cutoffs, and their different deductibles, were approved by state regulators, she said.

Officials said it was too early to estimate the overall savings to property owners as a result of the governors’ decision. But as an example, the Insurance Information Institute said a $300,000 house could typically have a flat deductible of $500 to $1,000 for damage caused by a low grade storm; the owner would pay that out of pocket before the insurance coverage kicked in. But the same house might have a 5 percent deductible for the same amount of damage in a hurricane, so the homeowner would pay $15,000 out of pocket.

Although most policies on homes in coastal areas use the two types of deductibles, the particular details can vary considerably. In New York, the percentage deductibles generally run from 1 percent to 5 percent, while in Connecticut the range is generally from 1 percent to 2 percent of the rebuilding cost. Policies can also differentiate between different categories of hurricanes.

Although the governors’ decisions will put a greater burden of repair costs onto the insurance industry, Moody’s Investors Service issued a special report on Wednesday saying that the storm was likely to hurt fourth-quarter profits in the industry but not to reduce the capital of any of the major companies writing business in the region.

The storm could cost insurance companies $7 billion to $15 billion in losses, including totaled cars, wind and storm damage to homes and businesses, and sales lost to closures, according to AIR Worldwide, a Boston-based risk-modeler. The estimate, released Tuesday, exceeded an earlier estimate from Eqecat of $5 billion to $10 billion of insured losses.

Because private insurers generally don’t cover the flooding of homes and businesses, a federal government insurance program is expected to pick up billions more in damages. It does not differentiate between windstorms and hurricanes.

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October 31, 2012

Amid Purity Questions, Drug Company Recalls Products

By SABRINA TAVERNISENYT

A drug producer linked to the pharmacy at the center of a national meningitis outbreak announced a recall of all of its products Wednesday after federal regulators found that it had not provided enough assurance that all the medicines it made were sterile.

The company, Ameridose, which is based in Massachusetts and is a major supplier of sterile injectable medications to hospitals across the country, underscored that there had been no reports of impurities in any of its products and said that it had announced the recall “out of an abundance of caution.”

The company sells more than 2,200 blended drug products, including tranquilizers, anesthetics and antibiotics, according to its Web site. The drugs are pumped into both injectable and oral syringes, as well as intravenous medicine bags. It said it would post the precise list of all the products on its Web site, ameridose.com.

The announcement represented another blow to the family behind Ameridose and its sister company, the New England Compounding Center, whose fungal-tainted steroid medication was responsible for the deaths of 29 people. Ameridose has taken pains to emphasize that it is legally distinct from New England Compounding. But the companies are owned by some of the same people. Federal officials have said Ameridose is part of the investigation because of concerns that it had some of the same business practices as New England Compounding.

Federal and state regulators have suspended operations at Ameridose until Monday. The Massachusetts Department of Public Health said Wednesday that the agreement with the company was “under review.”

Dr. Janet Woodcock, the director of the Center for Drug Evaluation and Research at the Food and Drug Administration, said in a telephone interview that the company offered to recall all of its products after federal officials shared the results of their inspection, which found fault with some of its sterility “assurances.”

Ameridose said in a statement that the F.D.A. had notified the company that the agency would “be seeking improvements in Ameridose’s sterility testing process.”

Dr. Woodcock emphasized that the recall was different from that of New England Compounding, where there was known contamination. The agency is not asking health care providers to track down patients who were given Ameridose products, she said, because there have been no reports of problems. Instead, providers are being asked to send the products back to the company.

In a statement, Ameridose said it had shipped more than 70 million “units of product” since its founding in 2006 without problems.

It said it had agreed to recall its products “because customer confidence is paramount to its business.”

Hospitals have reported difficulties in obtaining certain types of injectable medications that Ameridose produces since the company first suspended its operations, and Wednesday’s recall was likely to exacerbate those shortages.

Dr. Woodcock said that the agency was working to mitigate the shortages, in part by asking other manufacturers to increase production. But she added that concerns about lack of sterility were also important.

“We have to balance the risk of lack of sterility assurance against the issues of products not being available,” she said. “That’s a line we walk every day.”

BISSAU, Guinea-Bissau — When the army ousted the president here just months before his term was to expire, a thirst for power by the officer corps did not fully explain the offensive. But a sizable increase in drug trafficking in this troubled country since the military took over has raised suspicions that the president’s sudden removal was what amounted to a cocaine coup.

The military brass here has long been associated with drug trafficking, but the coup this spring means soldiers now control the drug racket and the country itself, turning Guinea-Bissau in the eyes of some international counternarcotics experts into a nation where illegal drugs are sanctioned at the top.

“They are probably the worst narco-state that’s out there on the continent,” said a senior Drug Enforcement Administration official in Washington, who spoke on the condition of anonymity so as not to jeopardize his work in the region. “They are a major problem.”

Since the April 12 coup, more small twin-engine planes than ever are making the 1,600-mile Atlantic crossing from Latin America to the edge of Africa’s western bulge, landing in Guinea-Bissau’s fields, uninhabited islands and remote estuaries. There they unload their cargos of cocaine for transshipment north, experts say.

The fact that the army has put in place a figurehead government and that military officers continue to call the shots behind the scenes only intensifies the problem.

The political instability continued as soldiers attacked an army barracks on Oct. 21, apparently in an attempt to topple the government. A dissident army captain was arrested on an offshore island on Oct. 27 and accused of being the organizer of the countercoup attempt. Two critics of the government were also assaulted and then left outside the capital.

From April to July there were at least 20 landings in Guinea-Bissau of small planes that United Nations officials suspected were drug flights — traffic that could represent more than half the estimated annual cocaine volume for the region. The planes need to carry a 1.5-ton cargo to make the transatlantic trip viable, officials say. Europe, already the destination for about 50 tons of cocaine annually from West Africa, United Nations officials say, could be in for a far greater flood.

Was the military coup itself a diversion for drug trafficking? Some experts point to signs that as the armed forces were seizing the presidency, taking over radio stations and arresting members government officials, there was a flurry of drug activity on one of the islands of the Bijagós Archipelago, what amounted to a three-day offloading of suspicious sacks.

That surreptitious activity appears to have been simply a prelude for what was to come.

“There has clearly been an increase in Guinea-Bissau in the last several months,” said Pierre Lapaque, head of the regional United Nations Office on Drugs and Crime for West and Central Africa. “We are seeing more and more drugs regularly arriving in this country.”

Mr. Lapaque called the trafficking in Guinea-Bissau “a major worry” and an “open sore,” and, like others, suggested it was no coincidence that trafficking has spiked since the coup.

Joaquin Gonzalez-Ducay, the European Union ambassador in Bissau, said: “As a country it is controlled by those who formed the coup d’état. They can do what they want to do. Now they have free rein.”

The senior D.E.A. official said that “people at the highest levels of the military are involved in the facilitation” of trafficking and added: “In other African countries government officials are part of the problem. In Guinea-Bissau, it is the government itself that is the problem.”

United Nations officials agree. “The coup was perpetrated by people totally embedded in the drugs business,” said one official, who spoke on the condition of anonymity because of the delicacy of the political environment here.

The country’s former prosecutor general, Octávio Inocêncio Alves, said, “A lot of the traffickers have direct relationships with the military.”

The civilian government and the military leadership that sits watchfully in its headquarters in an old Portuguese fort at the other end of town rebuff the United Nations drug accusations.

“People say I’m a drug trafficker. Anybody who has the proof, present it!” said Gen. Antonio Injai, the army chief of staff, raising his voice in an interview. “We ask the international community to give us the means to fight drugs.”

Mr. Gonzalez-Ducay, the ambassador, responded, “I can’t believe that the one who controls the drug trafficking is going to fight the drug trafficking.”

Relaxed and wearing a colorful two-piece outfit and gold chains, General Injai sat under a giant kapok tree surrounded by uniformed aides. He laughed when asked whether he was the real power in Guinea-Bissau and blamed the deposed prime minister, Carlos Gomes Jr., for provoking the coup through his military alliance with Angola.

In 2010, the United States Government explicitly linked the country’s military to the drug trade: the Treasury Department declared as drug kingpins both the ex-chief of the Navy, Rear Adm. Bubo Na Tchuto, and the Air Force chief of staff, Ibraima Papa Camara, and froze whatever assets they may have had in the United States.

Now, however, American officials are making overtures to the transitional government, despite other Western embassies’ hands-off approach to protest the military’s continued meddling in politics. General Injai expressed appreciation for the American position, and called the United Nations special representative here a “bandito.”

Russell Hanks, the American diplomat responsible for Guinea-Bissau, said: “You will only have an impact on this transition by engagement, not by isolation. These are the people who came in to pick up the pieces after the coup.” Mr. Hanks is based outside the country because the United States closed its embassy here during the civil war in 1998.

Officials point to several indicators, besides the increase in plane flights, to show that Guinea-Bissau has become a major drug transit hub.

They cite photographs of a recently well-cleared stretch of road in a remote rural area near the Senegal border, complete with turning space for small planes. The clearing was created under the supervision of military authorities, officials say. They also note mysterious absences of fuel at the tiny international airport in the capital, presumed stolen by traffickers.

Four months before the coup, a plane, with the aid of uniformed soldiers, landed in a rural area in the center of the country, which is the size of Belgium, said João Biague, head of the judicial police. The landing took place not far from General Injai’s farm.

Mr. Biague heads what is nominally the country’s antidrug agency, though he made it clear that he and his staff are largely powerless to practice any form of drug interdiction despite receiving frequent tips about small planes landing from abroad. “The traffickers know we can’t do much,” he said.

The agency is so starved of funds that he does not have money to put gas in its few vehicles, Mr. Biague said. Paint is peeling from the outside of the judicial police’s two-story colonial building downtown, and mold blackens the ground-floor pilasters. It is allocated $85 a week from the country’s justice ministry.

“The agents we have in the field want to give up because they have nothing to eat,” Mr. Biague said.

In the last three years, there have been more than a half-dozen unsolved political assassinations here, including of the longtime president and the former army chief of staff, as well as at least two coup attempts, besides the successful coup. Nobody has been successfully prosecuted, though drugs were linked to many of them.

Last month, the justice minister of the transitional government warned opposition politicians not to speak publicly of “cases that don’t concern them,” under threat of criminal penalty.

This week, the repression appeared to tighten. General Injai threatened journalists with death if they asked questions about the assassination of the former president, and he warned that there would be many arrests as a result of the countercoup attempt.

There is remarkably little public talk of the unsolved political killings or of the country’s relations with the drugs business. There have been no demonstrations; no discussion in the Parliament, shut down since July; no news conferences.

“A country that’s not capable of discussing its own problems — it’s not a country, it’s not a state,” said Mr. Alves, the former prosecutor general.

BEIJING — To outside observers, the move may appear to be little more than bureaucratic reshuffling: trim two seats from the nine-member body that governs China by consensus at the pinnacle of the Communist Party.

But the proposal by Chinese leaders to downsize the body, the Politburo Standing Committee, offers one of the clearest windows available into the priorities of the party and the mechanics of power-sharing and factional struggles as the leadership transition nears its climax at a weeklong congress scheduled to open Nov. 8.

The deliberations have taken place in private, in guarded compounds in Beijing and beachside villas east of the capital, but interviews with political insiders paint a portrait of party leaders pushing the change to maximize their holds on power while trying to steer the top echelons of the party away from the sclerosis and cronyism that has set in as more interests have become represented at the top.

Party insiders and political analysts say party leaders, including Hu Jintao, the current party chief and president, and Xi Jinping, his designated successor, are at the moment sticking to an earlier decision to shrink the committee to seven seats, which was the number before 2002, when the committee was expanded in last-minute deal-making before that year’s party congress.

“All the signs and information indicate that this time the standing committee will have seven members,” said Chen Ziming, a well-connected political commentator in Beijing who was imprisoned after the 1989 pro-democracy protests. “I think the goal is to increase the efficiency and unity at the top level. Everything is decided in meetings, and with fewer people it’s easier to reach decisions.”

The committee is a group of aging men with dyed hair and dark suits who make all major decisions about the economy, foreign policy and other issues. Their meetings are not publicized in the state news media. The party chief often presides, but they operate by consensus, which means decisions are generally made only when the members reach agreement.

They also must solicit the input of retired members, now more than a dozen, who at times exert considerable influence, most of all Mr. Hu’s 86-year-old predecessor, Jiang Zemin. Mr. Jiang and other elders are deeply engaged in the backstage negotiations to appoint the next generation of leaders.

Members of the committee represent different patronage networks and hold different portfolios — security, propaganda, the economy and so on — which can result in competing interests. Business lobbies are represented informally on the committee, and the members often have longstanding ties to China’s powerful state-owned enterprises; for example, the current chief of domestic security, Zhou Yongkang, once managed a state-owned oil company and is known to be a defender of the oil industry.

“Each of the nine wants to protect his patch,” said a political analyst connected to central party officials.

Alice L. Miller, a scholar of Chinese politics at the Hoover Institution, said at a recent talk in Washington that a shrinking of the committee represents an attempt by the party to address shortcomings. “The most compelling one is that there seems to be a trend in policy stagnation,” she said, “an inability to arrive at decisions collectively within the standing committee that I think shows up in a number of different ways.”

Yet the move to trim the committee, many experts argue, has exacerbated factional wrangling over its incoming membership. Mr. Xi and Li Keqiang, pegged to be the next prime minister, are virtually guaranteed seats. Other favorites now are Zhang Dejiang, a vice prime minister and party secretary of Chongqing; Wang Qishan, another vice prime minister; Zhang Gaoli, party chief of Tianjin; and Liu Yunshan, director of the propaganda bureau. With that lineup, the remaining seat is expected to go to either Li Yuanchao, head of the Organization Department, or Yu Zhengsheng, party chief of Shanghai. Both had been strong contenders until recent weeks, when word spread that either could be excluded.

The idea of shrinking the committee was first laid out in discussions in the summer of 2011, but it did not emerge as a plan until this year, said a central government media official with ties to “princeling” families from the Communist aristocracy of revolutionary leaders and their descendants.

“The entire top echelon came to a unified viewpoint on this general direction, including former standing committee members,” he said. “The consensus was that greater unity and efficiency was needed at the top.”

He and others said that the case of Bo Xilai, who was a controversial contender for a standing committee seat even before he was purged in a scandal last spring, also became a rationale for shrinking the body, in part to counter deepening divisions within the party. “If everyone was not singing a different tune, there’s no way that Bo Xilai could have emerged as he did,” said Li Weidong, another well-connected scholar.

Another important factor was the feeling among many party officials that the security apparatus has grown too powerful, particularly in the past five years under Mr. Zhou. Some also contend that Mr. Bo, in turn, was Mr. Zhou’s preferred successor.

As part of the contraction, the party commission post now occupied by Mr. Zhou would be downgraded from the standing committee to the Politburo level, with the portfolio expected to be given to a committee member with other responsibilities. The same could happen to the propaganda portfolio.

Word that the body could be trimmed to seven members began to spread through party circles at around the time party authorities polled top officials and elders in May on their picks for the next committee.

Mr. Xi and Mr. Hu may both be pushing for the downsizing of the committee, but they have different interests in mind, say party insiders. A smaller committee could, at least in theory, give either man more leverage and authority. And either could be better positioned to maneuver their allies and protégés into top seats at the next congress five years from now, halfway through Mr. Xi’s likely decade-long tenure, when several members of the committee would be expected to retire.

Mr. Hu’s power appears to have been hampered in the past decade by the fact that the committee was heavy with leaders who owe their promotions to his predecessor Mr. Jiang, Mr. Xi among them. Many party insiders blame factional tensions for contributing to Mr. Hu’s rigid aversion to promoting bold policies. Many of the current favorites for the standing committee are seen as protégés of Mr. Jiang, as well as likely allies of Mr. Xi.

Despite China’s economic growth of the past decade, there is now a strong sense among policy makers and intellectuals that the nation lost an opportunity to strengthen its economy and reinvigorate its political system. Mr. Xi is hearing a chorus of calls from policy advisers, academics and economists to rekindle the kind of liberalization that languished under Mr. Hu. But if he were to pursue that, he would confront an enormous challenge in forging consensus among elders, peers and other powerful interests.

Before Mr. Hu ascended to party chief in late 2002, he favored a seven-member committee, but he and Mr. Jiang failed to agree on the lineup. That resulted in Mr. Hu having to settle for a nine-member committee stacked with more of Mr. Jiang’s allies, said Mr. Chen, the political analyst.

Before that, committee seats had generally ranged from 5 to 7, though it reached 11 in 1966. Personal power struggles have played decisive roles before in determining the committee size. In 1987, party leaders had agreed to expand the committee to seven from five. But the top leader, Deng Xiaoping, was forced to scrap the plan after conservative elders sprang last-minute objections to two committee candidates, according to an account in a memoir by Zhao Ziyang, the party chief ousted in 1989.

The plan to shrink the committee this year could still founder if leaders fail to agree on who should be promoted to a smaller body. The end result could be a retention of the nine-member committee to accommodate all the interests.

*************

November 1, 2012

Restrictions Pave Path to a Transition in China

By ANDREW JACOBSIHT

BEIJING — A word of advice to anyone hoping to celebrate the gathering of Communist Party apparatchiks who are about to descend on the capital next week to anoint a new generation of Chinese leaders: Leave the balloons at home.

As this sprawling city of 20 million people steels itself for the 18th Party Congress, all sorts of potentially buoyant objects — balloons, homing pigeons, Ping-Pong balls and remote-control toy airplanes — are finding their way onto lists of suspicious items that could potentially carry protest messages and mar the meticulously choreographed political spectacle.

And this is just a tiny portion of the government’s rules and restrictions, circulated on the Internet but never officially acknowledged, that seem likely to make daily life especially challenging during the weeklong congress, which one provincial police department likened to a “state of war.”

In recent days, kitchen knives have been removed from store shelves, Internet access has mysteriously slowed to the speed of molasses, and international news channels like CNN and the BBC have disappeared from television sets in upscale health clubs.

At the Bookworm, a popular English-language bookstore, the section previously devoted to Chinese politics and history has been stuffed with Stephen King thrillers, child-rearing guides and Victoria Beckham’s “That Extra Half an Inch.”

“We’re just reorganizing,” one employee said with a helpless shrug. “They’ll be back after the party congress.”

In recent days, the list of interruptions and inconveniences has grown longer than a post-congress communiqué. Running marathons, academic conferences, pet adoption fairs, film productions and jazz concerts have all been canceled or postponed. Not just in Beijing but across the country, business deals at state-run enterprises have been frozen for weeks, employees say, while one frustrated Web designer said no new sites could go up until after party elders publicly presented the new slate of top leaders at the end of the congress.

The musician Gao Xiaosong, posting on the Chinese version of Twitter, said songs with the words “die” or “down” had been temporarily banned from television. “I just witnessed a singer who sang ‘Die for Love’ have his performance killed,” Mr. Gao wrote. “Colleagues should take this as a lesson.”

All facets of Chinese society have been affected. The China Securities Regulatory Commission warned stock traders to keep market volatility to a minimum and not “buck Beijing” ahead of the political event.

And some of the predominantly male delegates arriving from around China may be particularly disappointed by just how far officials have gone to eliminate distractions from the endless speeches and dinners taking place behind closed doors. At least half the capital’s prostitutes have already been arrested or driven out of town, according to Li Dan, whose nonprofit group provides outreach to sex workers.

For Chinese dissidents, the congress has already proved itself to be a slap in the face. Hundreds, if not thousands, of activists and government critics across the country have been placed under house arrest or forced to take “vacations” far from the capital, often in the company of police minders, according to human rights organizations.

Tsering Woeser, a Tibetan blogger, said national security agents forced her to vacate her Beijing apartment this month. “I guess they consider people like us inharmonious,” Ms. Woeser said, speaking by phone from Lhasa, the Tibetan capital, where she grew up. “They just want us invisible during their big important meeting.”

Pu Zhiqiang, a prominent lawyer in Beijing, said the party’s paranoia served only to fuel public disillusionment. “If the government actually represented the common people, they wouldn’t need to be so strict,” Mr. Pu said. “The party is so cynical they think the people must always be distracted and manipulated in order to maintain stability.”

So far the restrictions on Beijing taxis have produced the most complaints. Drivers have been ordered to disable their rear-window controls lest passengers toss antigovernment messages upwind from the Great Hall of the People, the imposing Mao-era confection on Tiananmen Square that is the site of the congress.

Cabdrivers have been promised rewards for turning in passengers “who intend to spread messages by carrying balloons that bear slogans or Ping-Pong balls bearing messages.” As part of the “zero spread” rules, drivers have been reminded to check rear seats for unseemly political messages that might have been left by passengers.

“It’s terribly inconvenient,” complained one driver, Li Weixu, who said he was most concerned about whether the government would reimburse him for the cost of replacing the hand-crank window handles that he was required to yank off.

Preparations for the party congress, many months in the making, have preoccupied anxious government bureaucrats across this vast nation. “Safeguarding social harmony and stability is a very important precondition for the opening of the 18th Party Congress and is the priority task and political responsibility of every level of government,” Zhou Yongkang, the nation’s security chief, said during a meeting with top officials in July, according to People’s Daily.

In one remote, largely Tibetan county in Qinghai Province, in China’s northwest, officials vowed harsh punishment for market vendors caught selling photographs of the Dalai Lama, the exiled spiritual leader, or for anyone “spreading obscene, pornographic and vulgar messages,” according to a notice circulated by the county government in Rebkong, or Tongren in Chinese. At the other end of the country, in coastal Shandong Province, 26,000 officials were sent to villages and small towns to make sure the rural “grass roots” remained pacific ahead of the party congress, according to the state-run news agency Xinhua.

Even the country’s most irrepressible government critic, the artist Ai Weiwei, has been largely reined in. Mr. Ai said his police minders suggested he could publicly talk or write about almost anything — except the coming party congress.

“To be honest, it’s O.K. because it’s just an internal meeting for those people,” he said, emphasizing “those” with faint derision. “It has nothing to do with me. Or with anyone else, really.”

Andreas Schockenhoff, Germany's commissioner for German-Russian coordination, has sparked tensions with Moscow with his unfiltered directness. In a SPIEGEL interview, he discusses worrying trends in Russia, why he has an obligation to speak out and what still gives him hope.

Relations between Berlin and Moscow have been chilly for some time. And on the German side, that has largely been due to the open critique of Moscow voiced by Andreas Schockenhoff, Chancellor Angela Merkel's commissioner for German-Russian cooperation.

Schockenhoff, a member of Merkel's conservative Christian Democratic Union (CDU), was recently named a coordinator in the Petersburg Dialogue, an annual German-Russian forum launched 11 years ago. And he has been open with his complaints about the rough treatment of opposition figures in Russia, the apparent weakening of the rule of law and, more recently, the controversial trial and sentencing of members of the punk band Pussy Riot.

More provocatively, however, was a draft resolution that Schockenhoff helped pen, which strongly criticized the leadership style of Russian President Vladimir Putin and charged that "state power (in Russia) views politically active citizens as opponents rather than partners." In late September, even before the resolution made it to parliament, it was openly criticized by fellow conservatives. Merkel's Chancellery was quick to point out that it had yet to approve the draft. And the Foreign Ministry insisted on watering down the draft.

Caught in the Middle

Nevertheless, Moscow quickly joined the fray. In mid-October, a spokesman for Russia's Foreign Ministry accused Schockenhoff of having defamed Russia on several occasion, adding that the Russia government no longer recognized him as Berlin's official representative for German-Russian relations.

Schockenhoff also came under attack from individual parliamentarians in Russia. Robert Schlegel, a member of the Duma with Putin's United Russia party, told SPIEGEL ONLINE that Schockenhoff "is raising a new iron curtain" and accused him of being "a type of European politician who makes a living criticizing Russia" and who is "incapable of forming an objective image of Russia."

Still, the Chancellery has continued to support Schockenhoff and reaffirmed his position in the Petersburg Dialogue, the next round of which is scheduled for November 14 to 16. Merkel herself will travel to Moscow to meet Putin at the dialogue, and her spokesman promised the chancellor will be just as open as Schockenhoff has been.

Schockenhoff: Moscow's statements about my position are a sign of alienation. It's too bad because this lack of trust is detrimental to our shared interests. Russia and Germany entered into a modernization partnership, but now Moscow has a different concept of modernization than we do. We have to discuss this openly.

SPIEGEL: That's putting it mildly. Moscow has accused you of defamation. The defendants in Stalinist show trials were vilified in much the same way.

Schockenhoff: Unfortunately, the fact that this term is being used is in keeping with the policy of intimidation we are experiencing in Russia at the moment.

SPIEGEL: How is that?

Schockenhoff: The fact is that the police, courts and lawmakers now rely on intimidation and repression of civil society. It's even possible to assign a date to when this approach began: May 6, 2012.

SPIEGEL: That was the day before Vladimir Putin returned to office to serve a third term as Russia' president. The day saw massive demonstrations.

Schockenhoff: We've seen a disconcerting development since then, in that the right of assembly has been curtailed. Then came the new NGO law, under which nongovernmental organizations that receive financial support from abroad are treated as "foreign agents." Finally, the Duma has once again made defamation a criminal offence.

SPIEGEL: Is Russia on the road to becoming a flawless autocracy?

Schockenhoff: I don't want to inflame the debate with catchphrases. The fact is that the Russian government is restricting the debate to the modernization of the armed forces and certain technologies. For a partner like Germany, this has to be cause for concern.

SPIEGEL: Do you think Russia is becoming a dictatorship?

Schockenhoff: Russia certainly isn't on a good path. Just look at demographic developments and the dramatic exodus of capital. Well-educated people are leaving the country in droves. These are poor conditions for modernization.

SPIEGEL: Do Putin and his people even listen to you anymore?

Schockenhoff: Russia isn't just Putin. There is an open and lively debate in the country, one which would have been inconceivable a few years ago. The opposition is currently trying to give itself structure. There is a self-confident middle class that wants more say in the political realm. These are developments that make open exchange and closer cooperation in civil society possible. Promoting this sort of cooperation is the goal of Germany's Russia policy.

SPIEGEL: That won't be all that easy. The Russians have made it clear that they no longer want to work with you as their dialogue partner. The Petersburg Dialogue will be held in Moscow in two weeks. Do you still plan to attend?

Schockenhoff: Of course. Within the Petersburg Dialogue, I am the German coordinator for the civil society working group. The Petersburg Dialogue was specifically created for a situation like the one we have today, where there are misunderstandings and a lack of trust. Right now, we need more rather than less open and unguided dialogue.

SPIEGEL: But a dialogue requires two parties.

Schockenhoff: When I look at the participants appointed by the Russians, I feel optimistic. They are men and women who have said critical things about Russian policy, and they are not people with close ties to the Kremlin. I'm sure that we can speak openly, even about differences of opinion. In this sense, the discussion about the goals and tasks of the Petersburg Dialogue has already paid off.

SPIEGEL: Do you feel adequately supported by the German government? The Foreign Ministry recently wanted to significantly tone down a resolution on the situation in Russia. You wrote the resolution, and it was submitted in Germany's parliament by the parties making up the ruling coalition, including Chancellor Merkel's CDU, the CSU and the business-friendly Free Democrats.

Schockenhoff: With these motions, it's normal for the government to have an opportunity to state its position on specific language. What's unusual in this case is that it made its way public. But the motion will constructively and critically address the situation of constitutionality and civil society in Russia. That's what's at stake.

Interview conducted by Ralf Neukirch. Translated from the German by Christopher Sultan

WASHINGTON — Security officers from the C.I.A. played a pivotal role in combating militants who attacked the American diplomatic mission in Benghazi, Libya, on Sept. 11, deploying a rescue party from a secret base in the city, sending reinforcements from Tripoli, and organizing an armed Libyan military convoy to escort the surviving Americans to hastily chartered planes that whisked them out of the country, senior intelligence officials said Thursday.

The account given by the senior officials, who did not want to be identified, provided the most detailed description to date of the C.I.A.’s role in Benghazi, a covert presence that appears to have been much more significant than publicly disclosed.

Within 25 minutes of being alerted to the attack against the diplomatic mission, half a dozen C.I.A. officers raced there from their base about a mile away, enlisting the help of a handful of Libyan militia fighters as they went. Arriving at the mission about 25 minutes after that, the C.I.A. officers joined State Department security agents in a futile search through heavy smoke and enemy fire for Ambassador J. Christopher Stevens before evacuating the mission’s personnel to the apparent safety of their base, which American officials have called an annex to the mission. Mr. Stevens was one of four Americans killed in the attack.

A four-hour lull in the fighting beginning shortly after midnight seemed to suggest that the worst was over. An unarmed military drone that the C.I.A. took control of to map possible escape routes relayed reassuring images to Tripoli and Washington. But just before dawn, and soon after a C.I.A.-led team of reinforcements, including two military commandos, arrived from Tripoli, a brief but deadly mortar attack surprised the Americans. Two of the C.IA. security officers who were defending the base from a rooftop were killed.

“The officers on the ground in Benghazi responded to the situation on the night of 11 and 12 September as quickly and as effectively as possible,” one of the senior intelligence officials told reporters.

Thursday’s briefing for reporters was intended to refute reports, including one by Fox News last Friday, that the C.I.A.’s chain of command had blocked the officers on the ground from responding to the mission’s calls for help.

“There were no orders to anybody to stand down in providing support,” the official said, speaking on the condition of anonymity because of continuing investigations by the State Department and the F.B.I.

At a time when the circumstances surrounding the attack on the Benghazi compound have emerged as a major political issue, with Republicans criticizing the Obama administration’s handling of the episode, the senior official also sought to rebut reports that C.I.A. requests for support from the Pentagon that night had gone unheeded.

In fact, the official said, the military diverted a Predator drone from a reconnaissance mission in Darnah, 90 miles away, in time to oversee the mission’s evacuation. The two commandos, based at the embassy in Tripoli, joined the reinforcements. And a military transport plane flew the wounded Americans and Mr. Stevens’s body out of Libya.

Despite the new details, many questions surrounding the attack remain unanswered, including why the State Department did not increase security at the mission amid a stream of diplomatic and intelligence reports that indicated that the security situation in Benghazi and around Libya had deteriorated sharply since the United States reopened its embassy in Tripoli last year.

By underscoring the C.I.A.’s previously unpublicized role in mobilizing the evacuation effort, the officials seemed to be implicitly questioning the State Department’s security arrangements in Benghazi, a focus of three Congressional inquiries into the attack on the mission.

The senior officials also shed new light on the C.I.A.’s role in Libya.

Within months of the start of the Libyan revolution in February 2011, the agency began building a meaningful but covert presence in Benghazi, a locus of the rebel efforts to oust the government of Col. Muammar el-Qaddafi.

The C.I.A.’s surveillance targets in Benghazi and eastern Libya included Ansar al-Shariah, a militia that some have blamed for the attack on the mission, as well as suspected members of Al Qaeda’s affiliate in North Africa, known as Al Qaeda in the Islamic Maghreb.

American intelligence operatives also helped State Department contractors and Libyan officials in tracking shoulder-fired missiles taken from the former Libyan Army arsenals, American officials said.

The C.I.A.’s security officers played a new role on Sept. 11, carrying out an informal agreement with the mission to come to its aid in an emergency. One of the senior intelligence officials provided an hour-by-hour chronology of the agency’s role during the attack.

Around 9:40 p.m. local time, the C.I.A. base received the first of several calls from the mission saying it was under attack. During the 25 minutes between the first call and when the officers rolled out the door, half a dozen security officers were readying their gear and weapons, while the base chief called several Libyan militias, seeking fighters with heavy weaponry to defend the mission. His appeals failed.

Over the next 25 minutes, C.I.A. officers approached the walled diplomatic compound, tried to secure heavy weapons, and made their way onto the compound itself in the face of enemy fire.

At 11:11 p.m., the Predator drone arrived over the mission compound. Within 20 minutes, all United States personnel, except for Mr. Stevens, whom the American security officers could not find in the chaos, left the mission, coming under fire as they did.

The Americans retreated safely to the C.I.A. annex, where over the next 90 minutes they came under sporadic small-arms fire and rocket-propelled-grenade attacks. The State Department and C.I.A. officers returned fire and the assailants melted away.

About this same time, the reinforcements arrived at the Benghazi airport from Tripoli. Learning that the attacks at the annex had stopped, the team turned its attention to finding Mr. Stevens. But learning that he was at a Benghazi hospital, almost certainly dead, and that the security situation at the hospital was uncertain, the reinforcements headed to the annex.

They arrived shortly after 5 a.m., just before mortar rounds began to hit the annex. That attack, 11 minutes long, killed two men, whom the senior intelligence officials identified for the first time Thursday as C.I.A. security officers, Tyrone S. Woods and Glen A. Doherty, former members of the Navy SEALs. Until now the men had been publicly identified as State Department contract security officers.

Less than an hour later, a convoy of 50 heavily armed trucks from Libyan military intelligence arrived to help evacuate all American personnel from the annex to the Benghazi airport.

LONDON — Prime Minister David Cameron, who rose to power promising to unite his Conservative Party’s warring factions over Britain’s role in Europe, suddenly faces a political battle on the issue.

Late Wednesday night, despite intense lobbying by Mr. Cameron, a large faction of euro-skeptic Conservative rebels joined forces with members of the Labour Party to defeat a proposal backed by the prime minister on the European Union’s pending 1 trillion euro, or $1.3 trillion, budget.

Although Mr. Cameron wants Europe to exert budgetary discipline, his measure would have supported allowing European Union spending to increase at the rate of inflation over the seven-year life of the budget.

Labour has traditionally been pro-European Union. But Labour members of Parliament, along with the Conservative renegades, argue that at a time of deep public-sector cuts in Britain, accepting less than similar spending reductions by the European Union would be intolerable.

The vote on Wednesday night was nonbinding. But the political significance for Mr. Cameron, who will start budget talks with his 26 European Union partners at a summit meeting on Nov. 22 in Brussels, could not be more significant.

Having had to curb his party’s vehement anti-Europe sentiments in deference to his coalition government with the Liberal Democrats, the most pro-Union of all the major British parties, Mr. Cameron now is facing an outright rebellion in his party.

It is most likely all the more galling to him that Labour, already far ahead in public opinion polls, is stoking dissent to further weaken the prime minister.

Mr. Cameron has threatened to veto the proposed European budget, which would cover the period from 2014 to 2020, if the Union does not meet his demands to hold spending increases at or below the inflation rate.

Britain is one of the few European Union member countries that is a net contributor to its budget. Last year it paid in about £10 billion, or $16 billion, more than it received back in benefits. But Britain is hugely outnumbered by member countries that are net recipients and that are pressing for an increase in European Union spending even beyond the inflation rate.

Europe’s richest country, Germany, also is pressing for spending cuts, though not as much as Britain. And Chancellor Angela Merkel, who is deep in talks over how to keep the fragile euro zone in one piece, has little appetite for a nasty fight on the issue.

If Mr. Cameron were to return from Brussels with a budget in which spending was not cut, his political position could become all the more precarious.

He is almost certainly aware that his predecessors, Margaret Thatcher and John Major, both were fatally weakened because they could not unite their Conservative Party over Europe.

As many European leaders use the economic crisis to push for a more federal Europe, British popular opinion is pulling in the opposite direction.

The most concrete example is the rapidly rising popularity of the United Kingdom Independence Party, which advocates Britain’s outright exit from the European Union.

Led by the volatile and media savvy Nigel Farage, the Independence Party is now threatening to overtake the Liberal Democrats to become the third-largest party in Britain, after the Conservatives and Labour.

*************

SPIEGEL ONLINE11/02/2012 12:41 PM

A Future in Europe?: Commissioner Confronts London on EU Loyalty

Does Britain belong in the European Union? There are plenty both in the United Kingdom and on the Continent who have their doubts. Now, with the debate over the EU's next budget raging, a European Commissioner has challenged London to decide. In Germany, Chancellor Angela Merkel is also losing her patience over the squabble.

Many in the European Union have long rolled their eyes when conversation turns to the United Kingdom. Britain is often seen on the Continent as one of the most problematic members of the 27-member club, wary of any moves that might lead toward further European integration.

Now, as the EU begins earnest negotiations aimed at passing a budget to cover the years 2014 to 2020, it appears Brussels is beginning to lose its patience. Britain this week has been adamant in its refusal to accept the budget proposal of €1 trillion made by the European Commission and has demanded that it be slashed by up to 20 percent. Other member states would also like to see the budget proposal adjusted downward, but so far, the rhetoric from London has been uncompromising.

On Friday, European Commissioner for Financial Programming and Budget Janusz Lewandowski, Poland's representative in the EU's executive, said it was time for Britain to make a fundamental decision regarding its future in the European Union. "Of course there are limits," he said in an interview with the German daily Süddeutsche Zeitung. "We can't finance more Europe with substantially less money."

When asked if he was referring to budgetary criticism coming from London, Lewandowski said: "Of course I am also referring to Great Britain. Either they see their future in the European Union in the long term or they don't."

Lewandowski's comments come on the heels of several brash comments on the budget coming from leading British politicians. Parliament on Wednesday heaped pressure on Prime Minister David Cameron to push through deep cuts to the EU's proposed budget, as several members of his own party joined the opposition in a non-binding vote on the matter.

'Prepared to Use the Veto'

Even before the vote, Cameron had hinted at what his negotiating stance will be when European leaders gather in Brussels on Nov. 22 to pass the budget. "This government is taking the toughest line in these budget negotiations of any government since we joined the European Union," Cameron said. "At best we would like it cut, at worst frozen, and I'm quite prepared to use the veto if we don't get a deal that's good for Britain."

His finance minister, Chancellor of the Exchequer George Osborne, echoed the sentiment on Thursday. "We will veto any deal that is not good for the British taxpayer," he said.

Lewandowski is not the only one losing his patience with the tone of the debate. Several European leaders have waded into the budget debate in recent days and some have used language similar in its firmness to that coming out of London. Indeed, France likewise threatened to veto the budget if agricultural subsidies are cut. German Chancellor Angela Merkel on Thursday asked that the volume be turned down. "I don't want to throw more vetoes into the room," she said at a press conference. "It doesn't help bring about a solution."

In his interview with the Süddeutsche, Lewandowski sought to defend his budget proposal, saying all it asks for is year-on-year inflationary adjustments to the budget as it stands in 2013. In other words, he says, Brussels isn't asking for more money at all. He points out, however, that due to enlargement and other increased demands being placed on the EU, Brussels needs the money it has requested to fulfil its obligations.

"You should not forget that in the course of recent years, leaders have handed the EU new obligations," he said. "Unfortunately it is often the case that the financial aspect is forgotten."

Average Greeks are reeling under the strict austerity measures passed in order to balance the country's budget. Top earners, on the other hand, continue to evade the tax man. Most of the self-employed in Greece significantly underreport their earnings, whereas shipping magnates enjoy generous exemptions.

The principle of tax justice may be enshrined into the Greek constitution, but it has become increasingly obvious that not all Greek taxpayers are created equal. Currently, the government in Athens is preparing yet another round of harsh austerity measures, severely testing the cohesion of both the coalition and society. Already, such measures in combination with tax hikes have slashed average household income in Greece by half since the beginning of the crisis. Measures now planned will see pensions sink by 25 percent.

At the same time, though, a small elite of wealthy Greek ship owners is fighting to defend its tax-free status -- also, ironically enough, enshrined in the constitution. Meanwhile, other moneyed Greeks, including doctors, lawyers and engineers, continue to systematically avoid taxes. According to a recent study, seven out of 10 self employed Greeks significantly underreport their earnings. Indeed, though the crisis has been raging for five years now, many wealthy Greeks are under no more pressure to pay taxes than they were before.

The study's authors use data from a large Greek bank which uses several factors in addition to income reports to measure a client's creditworthiness. The result: Undeclared income from self-employed Greeks amounted to €28 billion in 2009, more than 10 percent of the country's gross domestic product that year. The state lost €11.2 billion euros in tax revenues as a result.

Doctors lead the way: Their real income is almost 2.5 times higher than the amount they declare. Lawyers are not far behind, with economists, journalists, and those in the entertainment business rounding out the top slots on the list. "Tax evasion is not limited to the wealthy," the study finds. "But tax evasion does increase in wealth, substantially."

How, though, given Greece's attempts in recent years to shore up tax revenue, is this still possible? A lawyer in Thessaloniki who wished to remain anonymous says it is really quite simple to cheat on taxes. "Until recently, there was a minimum fee of €300 for presenting a case in court. Big-shot lawyers would charge their clients thousands of euros, yet would only give a receipt for €300. I know of wealthy lawyers who have been in the business for 30 years who do not pay a single euro in taxes. Some of them even boast of getting tax returns."

Largely Symbolic

As such, it is perhaps not surprising that the number of Greeks declaring incomes of over €500,000 is a mere 200 people. Even if the government moves ahead with the application of a 50 percent tax rate on those incomes, the move would be largely symbolic.

Meanwhile, following five years of recession, many average earners in the country are angry. Iordanis Iordanidis, a 37-year-old father of two who has been unemployed since losing his job at a multi-national pharmaceutical company in October 2011, says he despairs when trying to figure out a way to cope with new taxes. "It seems their inventiveness in imposing new burdens to the same people is unlimited," he says bitterly.

Manthos Neofitidis, a 35-year-old who once worked in a retail chain, is likewise furious. "This mess we are in was caused by the few who pull the strings, leaving us to eat stale bread and not giving a damn," he says. "They don't care if people die, so long as they fill their own pockets."

Few would agree more than Yiannis Stournaras. Currently, Stournaras is the country's economy minister, but prior to moving into government, he was head of the influential Institute for Economic and Industrial Studies (IOVE). Eight months before taking on his current portfolio, Stournaras said in an interview that Greece "is a poor country with rich people" who do not pay taxes.

Stournaras is now discovering that taxing the rich is easier said than done. And there is no better example than that of ship owners, who claim to operate the largest merchant fleet in the world. Ship owners benefit from dozens of tax exemptions meant to guarantee their competitiveness. Successive Greek governments have left their special status untouched, neither has it been a prominent item on the public agenda or in Greece's ongoing negotiations with its international creditors.

Treading Carefully

According to people familiar with the matter, the government of Prime Minister Antonis Samaras recently asked shippers to do more. But, they add, the key word here is "asked" -- the government has to tread carefully as any hint of extra fiscal burden might lead this mobile class to relocate. Nevertheless, Samaras is said to have recently reached an agreement with shipping magnates on the introduction of a new cargo tax. It won't, though make a huge difference. Given a sovereign debt load of some €350 billion, the €200 million such a tax will bring in by 2016 is but a drop in the Mediterranean.

Shipping industry representatives argue that a substantial increase in their tax burden would drive away companies and cost jobs in Greece, already suffering from high unemployment. "If Greece taxed shippers, it would be just for show and it would be like shooting itself in the foot," says one industry expert who asked not to be identified. "The shipping industry is extremely internationalized ... and is favorably treated by tax regimes all over the world - perhaps nowhere more so than in Germany itself."

Indeed, German shipping companies are liable only for the so-called "tonnage tax," which taxes cargos by weight and not by profit. It should be noted, however, that Germany and other European Union countries introduced the tax in the 1990s -- modelled on the Greek regime which has existed since the 1950s.

Still, even just a moderate tax on shipping magnates could lead normal Greeks to have more faith in the fairness of the system -- and improve the willingness to pay taxes. The country is currently stuck in a vicious circle in which Greeks don't want to pay taxes because they have the feeling that nobody does. Friedrich Schneider, a professor of economics at the University of Linz in Austria and an international expert on the Greek shadow economy, says that "in Greece, there is a breach of the social contract, which sinks tax morale. People are angry and rightfully so."

The current government is not completely ignoring the issue. Athens is currently considering the establishment of a 100-strong unit to go after wealthy tax evaders. That they will find success seems doubtful. Out of 5,000 cases of suspected of tax evasion gleaned from Greek bank records, only 334 have been conclusively settled. And with Greece's notoriously slow bureaucracy and judiciary, it could be years before the state actually receives any extra cash from wealthy tax-dodgers.

In the meantime, normal people like Iordanis Iordanidis will have to keep playing the role of what Greeks colloquially call the "beasts of burden."

Never mind Sicily or Naples, the most crime-ridden European region is what the French call "the Isle of Beauty" — Corsica. There, nationalists and racketeers, who are sometimes one and the same, are regularly felled by bullets. A journalist from French daily Le Monde took a “murder tour” of the sites of these crimes that everyone knows about but which are cloaked in a shroud of silence.Ariane Chemin

There are no candles or flowers to serve as a vigil for their last moments. In the places where they fell, you can find none of those improvised altars seen on every roadside, plastic sentinels which year in, year out, honour the memory of car accident victims. There are few or no commemorative plaques either such as the one for the WW2 resistance fights on Ajaccio’s Cours Napoleon.

Despite the epitaphs carved on their marble gravestones, which state that, although they were killing one another, they fell “per la nazione”, there are no traces of memorials for the activists of the FLNC, Corsica’s National Liberation Front. For the last six years, since the murder of Corsican parliament member Robert Feliciaggi, new ghosts are coming to haunt Ajaccio at an alarming rate. And the island's administrative capital is rapidly becoming like a corpse-strewn battlefield.

The streets of Napoleon's imperial city are the site of a recent crime wave with as victims, the members of a handful of rival factions that rule the city now that it is freed of the supervision of [nationalist] elders and underworld godfathers. This is a new criminal landscape, layered over two previous murderous shooting sprees.

Shot like a rabbit

There was one in 1995, when, during the "civil war" between nationalist groups, a death in one camp was avenged by a death in another within twenty-four hours. There is also an older – even bloodier – episode which shook up the town some forty years ago, the Combinatie War, named after a cargo ship full of cigarettes that floundered in the Gulf of Ajaccio. The battle for the cargo's booty structured the underworld in Corsica and in Marseilles [home to many Corsican émigrés] for decades.

This spiral of murders, which are due neither to chance nor to ideals, began in the parking lot of Ajaccio airport. In 2006, Robert Feliciaggi was killed with two bullets to the back of the head as he loaded his luggage into the boot of his BMW. He was a businessman, jolly and rotund, who wore a blazer and smoked a cigar. He was not quite a thug nor a nationalist and was not a godfather either, unlike some of his friends. And it’s there, near the Avis car rental centre, where visitors hurry to pick up their rentals, that this strange trip, this mortuary game of Snakes and Ladders, begins before stopping, at least for the time being, at a gas station on the Sanguinaires Road, where the lawyer, Antoine Sollacaro, was killed on October 16.

From the airport parking lot in which "Robert", as all of Ajaccio called Feliciaggi, fell and going towards the old town, the four-lane highway turns right towards Mezzavia, the shopping mall. Here, within a few dozen metres there were no less than four deaths. In front of the school, fell Jules Massa, the body guard of the late clandestine FLNC leader François Santoni. Across the street, there is a plaque in honour of “Doctor Lafay”, placed between the pizza truck in which a vendor was killed and the former chamber of agriculture in front of which its president, Lucien Tirroloni, was gunned down by twenty-five 9mm rounds in 1990 during a Christmas ceremony. Lafay, a veterinarian, had created an association to help the victims of terrorism.

Wounded in 1982 by three FLNC bullets, he was asked, five years later to talk about "the violence" by France 3 Corsica television station. On leaving the studio, he was shot like a rabbit, on the pavement out front. Archive photos show "Doctor Simeoni" a nationalist hero from Aléria, his opponent in the television debate, giving the unfortunate man mouth-to-mouth resuscitation.

“Better to be the butcher than the calf”

"Violence invades the landscape, moulds mind sets, organises society, feeds conversations, darkens newspaper columns, litters the decor with ruins and pollutes the streets," wrote the severe Corsican essayist Nicolas Giudici before he was murdered in 2001. At the bottom of the Cours Napoleon is the notorious General Fiorella Street [the site of a bomb attack earlier this year].

One of the city's rare memorial plaques can be found at the Kallisté-Bouffe Bakery where gendarmes from the nearby station stop to pick up a sandwich. It was here that on February 1998, regional prefect Claude Erignac was "foully murdered" while on his way to the Kallisté Theatre. In the window of the now unused theatre nothing has changed. "The Corsican Brothers" by Alexander Dumas, which takes place in the village of Sollacaro, is still on the bill as it was fourteen years ago. And the Avignon Orchestra is still playing Schubert's Unfinished Symphony.

It's still through the city's bars that, in a matter of minutes, news of the latest "malamorte" – a violent death – makes the rounds of Ajaccio, followed by a litany of sayings: "Better he than I", "Better to be the butcher than the calf", "Better to see the police than the priest". These are often accompanied by a gesture of helplessness: "If you don't know why he is dead, he does". The murder then becomes the sole source of conversation for several days – but as soon as someone comes up to a neighbouring table, voices are lowered.

A resident of Ajaccio explains, but on condition that his name be withheld – fifty- seven years after the fact – that, as a child, after having a glass of grenadine at the Sporting Café, he heard gun shots and shouted: "'They killed François!' I still remember the whack my father gave me." Murders are only spoken about between intimates, "especially in the summer when all the windows are open," he explains.

“It is part of our heritage”

At best, the victims will have a room in the courthouse named after them as will probably be the case for the late barrister Antoine Sollacaro, or maybe a boulevard as did Marie-Jeanne Bozzi, murdered on April 21, 2011 in a parking lot in Porticcio, the town of which she was the mayor. On the shore side of the Cours Napoleon, not far from the regional administrative offices, who remembers that a nationalist activist, Yves Manunta, nearly died there in 1996? Ninety-nine bullets were not enough to get the better of him. In November 2011, less than a hundred yards from his first battleground, some fifty bullets again whistled past him. His wife and his 10-year old daughter were wounded – they are today under the surveillance of the protection service for high-level personalities.

In between the attacks, Yves Manunta became one of the two founders of SMS, a security company and the island's third largest employer, responsible for airport and port security in Corsica and on the French Riviera. But he had a falling out with his partner, Antoine Nivaggioni. Wearing a bullet-proof vest, facing the door of the bistrots where he used to come for a ride on his scooter, Yves Manunta was still joking at the beginning of the summer: "They call me The Survivor". But on July 9 some hit men finished him off at the end of the street on which he refused to live like a cornered rat. "At the bend, we are forced to think of him every day," says a civil servant who works at the Corsican Parliament, located just a hundred metres away.

A little further down, towards the sea, is where the other SMS partner, Antoine Nivaggioni, was executed on October 18, 2012. Everybody in Ajaccio knew "Antoine". He was the son of the owners of the La Parisienne green grocers, the one open late at night on the Cours Napoleon. Two men popped out of a chest on the roof of a car parked in front of the building. Using shotguns, handguns and assault weapons, the shooters did not give him a chance that day. "At least they filled the holes," sighs a resident in front of the signs of impact that pepper the wall. A dab of plaster slabbed over the stigmata of a murder that the city would rather forget.

"The dead, we think of them several days, several weeks then it passes, just like everything," says a hairdresser on Fesch Street, the city's shopping street on which a member of Ajaccio's gangs was gunned down on January 29, 2009. "How can I put it? It is part of our heritage," he suggests. "If we put up funerary slabs every time, the city would be like Calvary," adds another, using nearly the same words as [French writer Prosper] Mérimée to speak of the "cemetery" that Porta Square in Sartena would become if a cross were put up each time a man fell.

“Sometimes I cross people I thought were dead”

In April, when Jean-Pierre Rossi, owner of a kebab shop near the police station was shot while taking out his trash around midnight, everybody understood that he was mistaken for another. The entire town muttered the name of the "lucky" neighbour, so to speak. The sushi vendor at the corner of the street wanted to put up a memorial plaque. Most the street's residents refused. The only funerary slab Jean-Pierre Rossi has today is the real estate agent's "For Sale" sign.

The figures of the dead must not lurk on street corners. "It's not cowardice; it's a protection, a way of life and of survival. How to do otherwise when you greet, in a bar, a guy who's done eighteen years of jail time?" asks a local journalist. Corsican society, he says, is a society based on lies about itself. "The island has no function other than as a decor, like in French 19th century literature. We are the last to imagine that Corsica is a protected region. We live in a kind of Cinecitta without human figures," he explains.

There are no literary traces to be found in this murder tour, not even obliquely in local whodunits. It is not in the guide books either. "I thought about publishing a book of photos of the roadside crosses that dot the island but I gave up," admits publisher Jean-Jacques Colonna of the Istria publishing house, "I could see it wouldn't fly. So, murders..."

In the morning, at the terraces of the Golfe or the Napoleon cafes, Ajaccio old-timers check out the obituaries in local daily Corse-Matin before sending out their letters of condolences in the afternoon. "After a while you know everybody," they say. But when their brains are picked to understand the locations and the mysteries of this funeral tour, a mischievous back-tracking immediately occurs: "I have no memory. Sometimes I cross people in the street that I thought were dead, things go so quickly."

WASHINGTON — The US unemployment rate rose to 7.9 percent in October from 7.8 percent the prior month, the government said Friday in a highly anticipated report ahead of the November 6 election.

Though the jobless rate ticked up a notch, the economy added 171,000 jobs in October, well above expectations.

The Labor Department said the unemployment rate was “essentially unchanged” at 7.9 percent, and noted job growth in professional and business services, health care and the retail sector.

The number of unemployed people — 12.3 million — was slightly higher, following a dip in September.

Most analysts had forecast the rise in the unemployment rate, but the job growth far outpaced the 125,000 estimate.

The better-than-expected jobs report serves as the final snapshot on the economy as President Barack Obama battles for re-election next Tuesday in a neck-and-neck race against Republican challenger Mitt Romney.

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Supreme Court doubtful on warrantless police detention

By Agence France-PresseThursday, November 1, 2012 21:18 EDT

WASHINGTON — The US Supreme Court showed skepticism Thursday of the government’s argument that police can follow and arrest a suspect while waiting for a search warrant, even far from the premises.

The case involves a man from Long Island, New York who was sentenced to 30 years in prison on drug and weapons charges. Chunon Bailey was detained about a mile (1.6 kilometers) from his residence while police searched his home and found weapons, ammunition and drugs.

Bailey says police violated his rights under the Fourth Amendment of the US Constitution, which guards against unreasonable searches and seizures, and requires a warrant to be sanctioned and supported by probable cause.

Both liberal and conservative judges indicated they did not want to expand police powers that already grant authorities the right to detain any suspect tied to premises being searched under warrant.

“What you’re arguing for is a special rule which says once you have a warrant that this place can be searched, you can seize anybody — you can seize not only anybody there in order to protect the police, but anybody connected with the place,” Justice Antonin Scalia told Justice Department lawyer Jeffrey Wall.

“And that is so contrary to what seems to me the theory of the Fourth Amendment that I am very reluctant to extend our cases any further than they already exist.”

Sonia Sotomayor, with the liberal wing of the court, was also reluctant to authorize arrests “merely for purposes of investigation without any reasonable suspicion.”

In 1981, the court ruled in Michigan v. Summers that police could detain people without suspicion during a search in order to prevent them from harming officers.

But in the Bailey case, a lower court said detentions should be extended beyond the place being searched.

The high court is due to rule on the case next year

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November 1, 2012

Nonpartisan Tax Report Withdrawn After G.O.P. Protest

By JONATHAN WEISMANNYT

WASHINGTON — The Congressional Research Service has withdrawn an economic report that found no correlation between top tax rates and economic growth, a central tenet of conservative economic theory, after Senate Republicans raised concerns about the paper’s findings and wording.

The decision, made in late September against the advice of the agency’s economic team leadership, drew almost no notice at the time. Senator Charles E. Schumer, Democrat of New York, cited the study a week and a half after it was withdrawn in a speech on tax policy at the National Press Club.

But it could actually draw new attention to the report, which questions the premise that lowering the top marginal tax rate stimulates economic growth and job creation.

“This has hues of a banana republic,” Mr. Schumer said. “They didn’t like a report, and instead of rebutting it, they had them take it down.”

Republicans did not say whether they had asked the research service, a nonpartisan arm of the Library of Congress, to take the report out of circulation, but they were clear that they protested its tone and findings.

Don Stewart, a spokesman for the Senate Republican leader, Mitch McConnell of Kentucky, said Mr. McConnell and other senators “raised concerns about the methodology and other flaws.” Mr. Stewart added that people outside of Congress had also criticized the study and that officials at the research service “decided, on their own, to pull the study pending further review.”

Senate Republican aides said they had protested both the tone of the report and its findings. Aides to Mr. McConnell presented a bill of particulars to the research service that included objections to the use of the term “Bush tax cuts” and the report’s reference to “tax cuts for the rich,” which Republicans contended was politically freighted.

They also protested on economic grounds, saying that the author, Thomas L. Hungerford, was looking for a macroeconomic response to tax cuts within the first year of the policy change without sufficiently taking into account the time lag of economic policies. Further, they complained that his analysis had not taken into account other policies affecting growth, such as the Federal Reserve’s decisions on interest rates.

“There were a lot of problems with the report from a real, legitimate economic analysis perspective,” said Antonia Ferrier, a spokeswoman for the Senate Finance Committee’s Republicans. “We relayed them to C.R.S. It was a good discussion. We have a good, constructive relationship with them. Then it was pulled.”

The pressure applied to the research service comes amid a broader Republican effort to raise questions about research and statistics that were once trusted as nonpartisan and apolitical.

The Bureau of Labor Statistics on Friday will release unemployment figures for October, a month after some conservatives denounced its last report as politically tinged to abet President Obama’s re-election. When the bureau suggested its October report might be delayed by Hurricane Sandy, some conservatives immediately suggested politics were at play.

Republicans have also tried to discredit the private Tax Policy Center ever since the research organization declared that Mitt Romney’s proposal to cut tax rates by 20 percent while protecting the middle class and not increasing the deficit was mathematically impossible. For years, conservatives have pressed the nonpartisan Congressional Budget Office to factor in robust economic growth when it is asked to calculate the cost of tax cuts to the federal budget.

Congressional aides and outside economists said they were not aware of previous efforts to discredit a study from the research service.

“When their math doesn’t add up, Republicans claim that their vague version of economic growth will somehow magically make up the difference. And when that is refuted, they’re left with nothing more to lean on than charges of bias against nonpartisan experts,” said Representative Sander Levin of Michigan, ranking Democrat on the House Ways and Means Committee.

Jared Bernstein, a former economist for Vice President Joseph R. Biden Jr., conceded that “tax cuts for the rich” was “not exactly academic prose,” but he said the analysis did examine policy time lags and controlled for several outside factors, including monetary policy.

“This sounds to me like a complete political hit job and another example of people who don’t like the results and try to use backdoor ways to suppress them,” he said. “I’ve never seen anything like this, and frankly, it makes me worried.”

Janine D’Addario, a spokeswoman for the Congressional Research Service, would not comment on internal deliberations over the decision. She confirmed that the report was no longer in official circulation.

A person with knowledge of the deliberations, who requested anonymity, said the Sept. 28 decision to withdraw the report was made against the advice of the research service’s economics division, and that Mr. Hungerford stood by its findings.

The report received wide notice from media outlets and liberal and conservative policy analysts when it was released on Sept. 14. It examined the historical fluctuations of the top income tax rates and the rates on capital gains since World War II, and concluded that those fluctuations did not appear to affect the nation’s economic growth.

“The reduction in the top tax rates appears to be uncorrelated with saving, investment and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie,” the report said. “However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.”

The Congressional Research Service does such reports at the request of lawmakers, and the research is considered private. Although the reports are posted on the service’s Web site, they are available only to members and staff. Their public release is subject to lawmakers’ discretion.

But the Hungerford study was bound to be widely circulated. It emerged in the final months of a presidential campaign in which tax policy has been a central focus. Mr. Romney, the Republican nominee, maintains that any increase in the top tax rates on income and capital gains would slow economic growth and crush the job market’s recovery.

President Obama has promised to allow cuts on the top two income tax rates to expire in January, lifting the rates from 33 and 35 percent, their level during most of George W. Bush’s presidency, to 36 percent and 39.6 percent, where they were during most of the Clinton administration. Mr. Obama maintains the increases would not hurt the economy and are the fairest way to reduce the deficit.

Mr. Hungerford, a specialist in public finance who earned his economics doctorate from the University of Michigan, has contributed at least $5,000 this election cycle to a combination of Mr. Obama’s campaign, the Democratic National Committee, the Democratic Senatorial Campaign Committee and the Democratic Congressional Campaign Committee.

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November 2, 2012

Campaigns Brace to Sue for Votes in Crucial States

By ETHAN BRONNERNYT

CLEVELAND — Thousands of lawyers from both presidential campaigns will enter polling places next Tuesday with one central goal: tracking their opponents and, if need be, initiating legal action. It will be a kind of Spy vs. Spy.

The lawyers will note how poll workers behave, where voters are directed, if intimidation appears to be occurring, whether lines are long. And they will report up a chain of command where decisions over court action will be made at headquarters in Chicago and Boston.

This will go on in every battleground state — including Wisconsin, Virginia, Florida, even Pennsylvania — but it will be most focused in Ohio and especially in Greater Cleveland, which is heavily Democratic and where many people believe history teaches a simple lesson: the more votes cast here, the likelier President Obama is to win.

As the persuasion effort winds down, campaigns are focused on getting their supporters to vote and getting those votes counted.

The result has been a mass mobilization of lawyers. The Democrats will have 600 lawyers in action here in Cuyahoga County and 2,500 across the state, their organizers say. They have been holding training sessions, grouping legal volunteers into workers and supervisors. The Republicans have much smaller teams — about 70 in this county — and will rely more on surrogates, including nonlawyer poll workers. Each side says the other cannot be trusted and, given the likelihood of a tight presidential race, the risks of litigation here — and delayed results — are high.

“If it’s close, you will see both sides running to court,” said Jeff Hastings, a Republican and chairman of the Cuyahoga County Board of Elections.

The Democrats say they fear acts of sabotage. “How tough would it be for them to send people to the wrong precincts and tie up poll workers to slow things down?” asked Stuart Garson, chairman of the Democratic Party of Cuyahoga County. “If we see someone getting in someone’s face, our lawyers will be there.”

Robert S. Frost, the chairman of the county Republican Party, said his legal volunteers would be at precincts where Republican poll workers were thinly represented in past elections and where there had been allegations of impropriety. He said the Democrats had built up such a huge legal team because their strategy was to create enough confusion so the race would have to move to court. “It’s pretty cynical,” he said. “That’s why we need to have people on the ground: to keep an eye on the other side.”

The Democrats feel the same way. “In each battleground state, we are recruiting thousands of attorney volunteers to help recruit, train, educate and observe at polling locations,” the Obama campaign said in a statement. “We’ve retained or opened pipelines to the nation’s top experts on voting systems, registration databases, ballot design, student voting, and provisional ballots.”

Party organizers say the recruitment is similar in number to those of the past two presidential elections, a result of the Florida stalemate, recount and Supreme Court decision in 2000 that gave the election to George W. Bush. But it began earlier and appears to be more widely spread this time. Some of the recruits are brought in from out of state, but most are local and will see any recount or challenge through what could be weeks of litigation on a range of issues.

This week, Robert F. Bauer, the chief counsel to the Obama campaign, sent a letter to the Wisconsin attorney general complaining about misinformation he said the Mitt Romney campaign was giving its poll observers during training there. According to the letter, the observers were being given incomplete information on voter identification requirements and assistance available for handicapped voters. They were also being urged to sign into polling stations as “concerned citizens,” which Mr. Bauer said was a misrepresentation and a possible legal offense.

In Pennsylvania, confusion remains over voter ID requirements that could lead to courtroom battles. Because of a new law passed earlier this year, poll workers there are instructed to ask voters for official photo IDs, but a judge ruled that voters who do not have them may vote in a normal way anyway. Ellen Kaplan of the nonpartisan citizen group Committee of Seventy said that she had warned state officials that their advertisements emphasized IDs in a misleading way and that court action might follow. “For this election, we have many, many lawyer volunteers,” she added.

Elsewhere, there are questions about absentee ballots and the rules on vote recounts as well as whether state or federal court is the right venue for each question. In Wisconsin, Romney officials are asking for an extension of the deadline for absentee ballots because some went out late to military personnel overseas.

A coalition of liberal nonpartisan groups led by the Lawyers Committee for Civil Rights Under Law will be operating in 22 states offering voters help and a hotline.

Here in Ohio, as in Florida, the first issue likely to go to court on Election Day is a request to keep polls opened late if lines are long. In the March 2008 Democratic primary here, the Obama campaign made just such a request minutes before polls were to close. Jane M. Platten, the director of the county Board of Elections and herself a Democrat, said that could be the campaign’s plan again this year.

A second issue expected to emerge in a close race here concerns provisional ballots, which are submitted when the voter’s address does not match the voter list or identification is insufficient. Those votes — there were more than 200,000 in Ohio in 2008 and 80 percent were deemed legitimate — could pose numerous problems and take weeks to sort through. In recent days, Democratic activists have noted that absentee ballots have been rejected for hundreds of people who were told they were not registered when a more detailed search showed that they were. This, too, could lead to a lawsuit.

Mr. Hastings of the Cuyahoga County election board said Republicans here would fight any request to extend Tuesday’s voting hours. He and other Republicans said that they would be monitoring polling sites to counter any claims by Democrats of excessive lines and that given the weeks of early voting, Ohio had done more than enough to help voters. On Sunday, as election officials everywhere prepare for the Tuesday onslaught, Ohio will have its voting sites open.

But that has come as a result of Democratic legal action. State officials, who are Republican, tried to cut back on early voting hours and reduce the outreach of certain counties to unregistered voters. These were done in the name of establishing uniformity and order but would also have served the partisan aim of reducing the number of voters. Democrats went to court and got them reversed or modified. In addition, voter challenges brought by conservative groups like True The Vote have in nearly every case been thrown out.

Still, the Republicans have had legitimate complaints, election officials say. Groups associated with the Democrats have sometimes been overly aggressive in voter registration, paying people for each voter registered or offering bonuses for larger numbers of registrations. This has led to fraud. Ms. Platten, the Democratic county elections board director, said she had seen multiple registrations for the same person whose Social Security number had been shifted by one digit.

“In the end, that hurts the Democrats,” she said, “because we throw those votes out. I’ve begged them to stop.”

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November 1, 2012

As Wolves’ Numbers Rise, So Does Friction Between Guardians and Hunters

By STEVEN YACCINONYT

GREENDALE, Wis. — When people like Nancy Jo Dowler started raising wolves here decades ago, the animals were rare in Wisconsin and nearly extinct across the country.

Now the president of the Timber Wolf Preservation Society, Ms. Dowler, 66, cares for five full-grown purebreds. She bottle-fed them as pups and howls with them at passing sirens. The other day she gave one breath mints through a hole in the fence, passing it directly from her lips to his.

Hers seems a fairy tale world compared with the legal dogfights occurring beyond these kennels. Out there, Wisconsin is three weeks into its first wolf-hunting season, sanctioned by the State Legislature in April. Minnesota is scheduled to begin its first registered wolf hunt this weekend.

The legalization of wolf hunting in both states was devised to manage a rebounding wolf population after the federal government stopped listing the species as endangered in the region last year. Both have drawn lawsuits from local and national animal rights groups that fear the undoing of nearly four decades of work to restore a healthy number of wolves.

“We’ve spent a lot as a nation to protect them,” said Wayne Pacelle, president of the Humane Society of the United States, which in October announced a lawsuit against the federal Fish and Wildlife Service to restore protections for wolves. “These plans in Wisconsin and Minnesota are draconian, severe and unwarranted, and we think they may jeopardize the health and viability of this population.”

Since the wolf hunt began last month, at least 42 have been killed in Wisconsin. All told, officials expect 600 wolves will die at the hands of hunters and trappers in the two states before spring.

Wolves were once so numerous in the United States that ranchers and government agencies paid people to kill them. By the time the Endangered Species Act began protecting wolves in 1973, they were nearing extinction in the lower 48 states. Today, wolf numbers have grown to 4,000 and exceeded recovery goals in the western Great Lakes area, according to federal estimates.

But some of those packs have started to cause problems again for ranchers in northern Wisconsin and have cost the state hundreds of thousands of dollars in livestock reimbursement payments, said officials at the Wisconsin Department of Natural Resources. “Without controls, what we’ve seen in the state is a feeling of needing to take it into their own hands for folks that are frustrated,” said Kurt Thiede, head of the wildlife management program for the agency.

After the Wisconsin Legislature approved the wolf hunt, which ends Feb. 28, more than 20,000 people applied for the required license. The state awarded 1,160 permits and capped this year’s harvest at 201 kills, or roughly a quarter of its current wolf population.

In Minnesota, about 3,600 licenses were available to hunt up to 400 wolves, which would reduce the state’s numbers by about 15 percent.

“There ain’t too many people that have one hanging in their living room,” said Timothy Mueller, a hunter from Silver Cliff, Wis. He, like others with a wolf license, was waiting for winter because pelts will be thicker and the snow will make it easier to track the animals.

Yet some hunters who once proudly talked about the rare opportunity would now rather keep their adventures private. A number declined to speak about the controversy because of reported threats made against a hunter who was among the first to register his kill with the state.

“There are a lot of the claims about how easy this is and how this is senseless slaughter,” said Scott Meyer, a lobbyist for the United Sportsmen of Wisconsin. “When you see the terrain and the geographies of everything, you understand that the advantage is toward the wolf.”

Animal rights groups have little sympathy for the hunters. They argue that the state kill quotas do not properly account for other ways that wolves can die, like poaching and vehicular collisions and the killing of the animals by farmers and ranchers protecting their livestock. Those additional causes, they say, could put the animals at risk again.

On Oct. 15, the day Wisconsin’s wolf-hunting season began, two national groups — the Humane Society and the Fund for Animals — filed a 60-day notice of their intent to sue the federal government to restore wolf protections.

In addition, Wisconsin humane groups have filed a lawsuit to prohibit the use of dogs for hunting wolves, calling it cruel. Minnesota advocates also took legal action against their state in an attempt to stop its hunt, which lasts from Nov. 3 to Jan. 31. And Minnesota’s Chippewa tribes have banned wolf hunting and trapping on its reservation lands.

“The whole balance of nature, they don’t want to hear any of that,” said Ms. Dowler, criticizing hunters for killing the animals she has devoted years to protect. “People absolutely love them or they absolutely hate them. There are few people in the middle.”

Racial Profiling in Germany: Court Rules Against Police Checks Based on Skin Color

Skin color alone is insufficient grounds for a police spot check, a German court has ruled. Human rights activists have welcomed the decision, which overturns a previous ruling in the case, but police representatives are critical, stating it doesn't adequately address the challenges faced by law enforcement.

The case has wound its way through the German justice system for nearly two years, but a court in Koblenz closed it on Monday, ruling that police should not conduct spot checks on people based on their skin color. Human rights groups are applauding the decision, but police representatives say it fails to consider the realities of law enforcement.

The case centered on an incident in December 2010, when police asked a dark-skinned student for his identification on a train ride between Kassel and Frankfurt. When the 26-year-old refused, a conflict with officers ensued and he was subsequently held at a police station. The young man, who is a German citizen, ultimately showed his ID, but also told officers that he felt their methods were reminiscent of those of the Nazi SS. Police charged the student with slander, but a court later dropped the case.

The man then sued the police for discrimination. During the court proceedings, the officers involved admitted that during controls of train passengers, skin color is a criteria police take into consideration, particularly if a person is suspected of being in the country illegally. In a decision that outraged human rights activists, the Koblenz administrative court ruled in the officers' favor this March, saying that under German law, on certain train routes known to be used by illegal immigrants, federal police are permitted to conduct controls on people who appear to be foreigners -- even without suspicion of wrongdoing.

But the student appealed the ruling with a higher court, which overturned the earlier ruling. "The court has made it clear that in its view the identification check was illegal because skin color was the deciding factor," said a statement released by the Higher Administrative Court for the state of Rhineland-Palatinate on Tuesday. According to the court, the police measure was a violation of Germany's anti-discrimination law laid out in Article 3 of the constitution, which states: "No person shall be favored or disfavored because of sex, parentage, race, language, homeland and origin, faith, or religious or political opinions."

Police Criticize Ruling

During proceedings on Monday, representatives of the federal police reportedly apologized to the man, and with that, all parties agreed that the legal dispute had been resolved.

The student's lawyer Sven Adam said that the ruling could be precedent-setting and send a "far-reaching message" about practices of the federal police. In a statement released by Adam, the student himself said: "We have had to fight for a long time to get the federal police to also adhere to the ban on discrimination."

Christine Lüders, the director of Germany's Federal Anti-Discrimination Agency welcomed the decision. "With this it is clear that a person's skin color alone is no criteria for a police identity check," she said.

In addition, human rights organization Amnesty International said the ruling sent an important message in anti-discrimination efforts. And the German Institute for Human Rights urged the government in Berlin to take steps to ensure that federal police no longer engage in the practice.

But the country's second-largest police union, DPolG, harshly criticized the ruling, saying that it did not adequately address the challenges faced by law enforcement. "One sees once again how the courts take a rose-tinted view of justice, but don't take practical application into account," DPoIG head Rainer Wendt told the news agency DPA. "This ruling is not good because it fuels conflict."

The country's largest police union, the GdP, said that the issue should be addressed on a case-by-case basis. "A person should never be checked based solely on his or her skin color, and the federal police don't do this as a rule," Josef Scheuring, the head of the union's federal police division, told DPA. But "particular situations and considerations" could justify such measures, he said, citing the existence of a prior suspect's description as an example. In the case of the 26-year-old student, however, he said the the court's ruling had been reasonable.

He was born in Germany, and he is black. A 26-year-old student who won a landmark court case against police for racial profiling this week speaks with SPIEGEL ONLINE about his moment of civil disobedience and whether he thinks the legal victory will change things for others like him.

SPIEGEL ONLINE: This week you won a court case against the federal police, who you took to court for discrimination after they conducted an identity check on you based on your skin color. It made headlines across the country, so why do you want to remain anonymous?

Student: First, this isn't just about me, but about everyone who has had a similar experience. It also isn't a very nice thing to be the person who speaks up about racism. Additionally, I don't want people to point their fingers at me because I filed this long-overdue case.

Student: I am going to college in Kassel and was headed home to see my family in Offenbach in December 2010. Along this route there are often federal police out searching for so-called "illegals," or foreigners without residency permits. In the two years prior, they had selected me about 10 times for a random check of my identification. It's a pretty rotten feeling. I was born and raised here. I am German. According to the anti-discrimination law in the constitution, skin color is not grounds for a spot check.

SPIEGEL ONLINE: So it happened again?

Student: Yes. I had just purchased a cup of tea from the snack vendor in the train when the police officers asked me in a commanding tone to show them my identification. I wanted to know why, but got no real answer, so I refused.

SPIEGEL ONLINE: How did the other passengers react?

Student: Most of them were shocked by the officers' conduct, and some audibly criticized them. At the next stop, I was forced to get off the train. The police officers pushed me in front of them, although I put up no resistance. On the train platform they called in backup from the state police and ransacked my backpack. There was a chocolate bar inside, and one of the officers asked me if I'd stolen it. At that point I decided not to speak to them again until we were at the police station.

SPIEGEL ONLINE: You could have just shown them your identification.

Student: I didn't want to be treated differently any longer. The police brought me back to the station in Kassel, where I was asked if I spoke English and had papers. They threatened to charge me high fees for taking my photograph and fingerprints, and for holding me in a cell. Then I showed them my driver's license and they let me go. It was the worst day of my life.

SPIEGEL ONLINE: Was your resistance spontaneous?

Student: I had looked into it ahead of time and knew that without cause for suspicion, the officers -- whether they were from the state or federal police -- must give me at least one reason for checking my identity.

SPIEGEL ONLINE: Did you sue for damages?

Student: No. I don't want any money. It was never about that for me. Friends said I had no chance with the case. But I found a lawyer who really threw himself into it. The case was rejected the first time by the Koblenz administrative court, which outraged many people. So I continued. I would have taken it all the way to the European Court of Human Rights.

SPIEGEL ONLINE: But the Higher Administrative Court for the state of Rhineland-Palatinate ruled that you were checked based on your skin color, and allowed your appeal. The police then apologized, effectively putting the case to rest. Did you accept the apology?

Student: Yes, I accepted it, but I don't feel it. The apology was formal, without remorse and not on a human level. The negative reaction of the police union (DPoIG) shows that some will continue to act the same way.

SPIEGEL ONLINE: The union's criticism was that the ruling did not reflect the realities of law enforcement and would make police work more difficult.

Student: Police checks are not allowed without grounds for suspicion. But apparently it is difficult for some police to accept that black Europeans are no longer a rarity.

SPIEGEL ONLINE: Human rights organizations and lawyers are calling the ruling a milestone, saying it will send a strong message about the issue. Aren't you happy about it?

Student: Well, I certainly have more hope than concern. People have told me that after the case was thrown out the first time, federal police used it as a sort of justification for skin-color based spot checks. I'll find out soon whether it will change anything for me personally.

Next week, Beijing will open its 18th party congress at which the Communist Party will select the country's new leader. One of the core issues at the meeting will be the role in China of a military that has gained considerable influence. Some in the party are unhappy with its powerful position.

Everyone who attended the event later said that this sort of thing had never occurred before, not once since the communists assumed power in China 63 years ago and the party assumed control of the military. It also happened when everyone was in a mood to relax, at a "holiday banquet" in honor of top generals.

The Communist Party in Beijing had organized the banquet in February to emphasize harmony between politicians and the military. When a senior officer in the air force was about to make a toast to his comrades in the political camp, General Zhang Qinsheng pushed him aside and shouted: "Enough of this cajolery! There are pigs in the party who are plotting against me!" Then he berated President Hu Jintao, who was also sitting at the table, and accused him of being part of the conspiracy against him. The outraged Hu stormed out, and the military officers still in the room had trouble controlling Zhang, who allegedly kept yelling obscenities.

Half a dozen of the attendees confirmed the incident, and their report was leaked to the New York Times and SPIEGEL. What is unclear is how inebriated the general was, and what has happened to him since then.

Zhang, 64, was suspended in May without any official explanation. It was the preliminary end of a stellar career. A member of the People's Liberation Army since 1968, he had worked his way up from commander of the Guangzhou military region to the rank of first deputy general chief of staff. Until a few months ago, he was even mentioned as a possible defense minister. But there was also talk that Zhang was politically unpredictable and not always willing to accept the primacy of the party.

Currying the Generals' Favor

He isn't the only one. In the run-up to the 18th party congress, which begins in Beijing next Thursday, the Communist Party leadership is experiencing substantial turnover. Of the top nine members of the leading body in the People's Republic, the Standing Committee of the Politburo, seven are to be replaced. A struggle is underway over the country's direction -- and for power.

Hu Jintao, 69, will step down as party leader and, at the end of his term in March, will hand over the presidency to current Vice President Xi Jinping, 59. But in all likelihood, he will not give up his chairmanship of the Central Military Commission, thus retaining control over the military until at least 2014. His two predecessors took the same approach. In addition, Hu has promoted at least 45 officers to the rank of general in the last eight years, in an attempt to secure their loyalty.

This must be an annoyance for China's new strongman, Xi. Without control over the military, his political latitude is diminished. Ironically Xi, unlike Hu, has had military experience and maintains close contacts within the armed forces. As a young man, he worked in the office of then-Defense Minister Geng Biao, a friend of his father from their days as guerilla fighters. And he is married to Peng Liyuan, an influential performer of soldier's songs who is adored nationwide, and who holds a civilian rank equal to that of a major general.

Xi has self-confidently allowed himself to become involved in a game of shadowboxing with his current boss. He has met with senior military officials several times in recent months. His closest allies include members of various schools of thought: General Liu Yuan, considered a hardliner and advocate of an aggressive policy, and General Liu Yazhou, who seems to support a political liberalization of his country based on the Singaporean model.

The struggle for the generals' favor increases their self-confidence. Alongside substantial increases in China's military budget (more than 11 percent for 2012, for example), some hardliners envision greater independence for and a depoliticizing of the army. This is a red rag to the Communist Party, which fears such shows of independence and, through the government press, warns nervously against "false ideas" with "hidden motives." These ideas, the Beijing propaganda tool Global Times writes, are being disseminated by the West and are a "strategic tool" to undermine the systems of socialist nations.

A Menacing Ring of Fire?

For the agitators in the army, it is more than a question of increasing their role within the domestic interplay of forces. They feel that China is surrounded, and argue for a new, sharper tone towards its Asian neighbors and, most of all, the United States. In the words of influential Communist Party official Li Qun, Washington has "strategically encircled" the People's Republic. As evidence, he cites the fact that the US Navy plans to station about 60 percent of its warships in the Pacific by 2020, putting more ships there than in both the Atlantic and the Persian Gulf.

Li is also convinced that the White House is making a concerted effort to form military alliances with China's neighbors. "Their real goal is not protecting so-called human rights," says Li. "They are using it as an excuse to constrain China's healthy growth and prevent China's prosperity and power from threatening their global hegemony." This, says Li, is why American military bases are being built from Afghanistan to perhaps even Vietnam soon, forming what the Chinese see as a menacing ring of fire. American military spending is still five times as high as the amount Beijing spends on its armed forces.

In this scenario, it isn't China that is torpedoing any progress toward peace, both in the Syrian civil war, through its United Nations Security Council veto, and with its hesitant position on Iran. The Chinese believe that with their military superiority, the hawks in Washington could shine a light on China's vulnerability in the event of a crisis, blocking seaways and thus cutting off access to the raw materials that are vital to the country's survival. Taiwan, which Beijing sees as nothing but a province of the People's Republic, is being armed and "used as a pawn to stop China's rise," writes retired General Luo Yuan in the US magazine Foreign Affairs.

Territorial Disputes

Chinese military leaders are especially upset about the United States meddling in the South China Sea, a region they view as their maritime backyard, in much the same way as the Americans view the Caribbean. The Far Eastern waters are believed to hold enormous oil and gas reserves, and China is claiming sovereignty over almost every group of islands in them. This has already led to territorial disputes with Vietnam and the Philippines.

Beijing's biggest territorial conflict at the moment is with its old archenemy Japan, over the uninhabited Senkaku Islands in the East China Sea, in Japanese hands since 1895. But China contends that historic maps from the Ming era prove that it owns the islands, known as the Diaoyu Islands in Chinese. The dispute threatened to escalate in mid-September, when Beijing sent patrol boats to the region. American diplomatic pressure in early October helped defuse the situation somewhat, with US Secretary of Defense Leon Panetta urging Beijing to exercise moderation. Almost concurrently, American and Japanese forces held a joint maneuver on the Pacific island of Guam.

It's highly unlikely that a full-blown armed conflict will erupt in the East China Sea, even though the Communist Party leaders recently had their ships advance into the vicinity of the disputed islands for "exercises." Most China experts in the West see Beijing's boastful generals as rational strategists, more interested in increasing their own power than actual battles.

But tensions with foreign powers can lead to economic wars. When the Japanese seized a Chinese fishing vessel near the disputed islands two years ago, Beijing limited the sale of the rare earth metals that are so critical to Japanese industry. And in September 2012, as a result of the current tensions, trade between the two countries declined by more than 14 percent compared with the same month in 2011.

In recent years, verbal disputes with Japan have led to several violent protests in cities like Beijing, Qingdao and Chengdu. But this nationalist fervor that the party likes to arouse could also become difficult to contain. When angry Chinese protesters attack Japanese facilities and set Toyotas and Hondas on fire, the situation threatens to spin out of control. Moreover, protests against foreign companies can quickly turn against China's Communist leaders in troubled regions with separatist movements, like Tibet and Xinjiang.

Xi Wants to Make China World's Second SuperpowerDesignated party chairman Xi Jinping is considered a tactically skillful and moderate politician. He is unlikely to risk curbing the powers of the military or even limiting the increases in their budgets. But he is also unlikely to support any military adventures.

Last week's shakeup in the military leadership seems to suit Xi's agenda. General Ma Xiaotian, 63, one of Xi's confidants, who comes from a well-known family of senior party officials, was made the new head of the air force. Ma, considered to be extremely self-confident, once told a Hong Kong television station that "the Americans have no business in the South China Sea." Allies of Bo Xilai, the former party chief in the southwestern city of Chongqing who is being accused of corruption and other crimes, have now been forced out of the military leadership. The Maoist mindset with which Bo sought to prevail against the pragmatists is also likely to fall out of favor now.

In the 1980s, Mao's successor Deng Xiaoping had advocated international restraint for China. His principle was known as "taoguang yanghui," which can be loosely translated to mean "hide our capabilities and bide our time".

But the times are long gone when the People's Republic was focused solely on its domestic economy. Xi will seek to solidify China's position as the world's second superpower, next to the United States, using both military muscle and the tools of economic policy. China touts its efficiently capitalist single-party dictatorship as both an alternative to Western democracy and a development model, especially for Asia, Africa and Latin America.

China Forges New Alliances

Unlike Washington or Berlin, Beijing expressly does not make loans and infrastructure aid conditional on human rights and good governance. It also seeks international groups in which Washington and Western Europe are not even represented, like the Shanghai Cooperation Organization (SCO), a sort of anti-NATO. Within the SCO Beijing, together with Russia and most of the Central Asian countries, has developed strategies against the risks of terrorism. Another group far up on Beijing's agenda is BRICS, an association of economically significant emerging economies that includes China, India, Brazil, Russia and South Africa. The group meets once a year. At its most recent meeting, this spring in New Delhi, it announced the formation of its own development bank to combat Western financial dominance.

China is also pursuing another strategy. In these months of global uncertainty, Beijing has increasingly focused on its cultural conflict with the West.

"We must clearly see that hostile foreign powers are plotting to westernize and divide China. Ideology and culture are the key areas of their infiltration," President Hu wrote in the party organ Qiu Shi (Seeking Truth). "We should take decisive measures to protect ourselves and react."

Chinese Values

Internationally, the party is betting on its own soft-power strategy. It argues that democratic institutions and the universal values preached by Western Europe are not what the world needs to recover from its problems, but rather Chinese values.

So what, exactly, does China stand for? Aside from its spectacular economic successes of the last three decades, what does it have to offer in the way of attractive and universally applicable values that are worth emulating? Where are the ideas, and where are the personalities with which China hopes to make an impact worldwide?

Huimin, a region along the Yellow River in Shandong Province in eastern China, isn't exactly an international place of interest, nor is the kind of place where the country's Communist leaders normally meet. But that wasn't the case last December, when the country celebrated the birthday of a Chinese sage. Philosopher and military strategist Sun Tzu was allegedly born in Huimin some 2,550 years ago.

Young men and women, all wearing old-fashioned military uniforms consisting of brown coats, yellow sequins and helmets, goose-stepped in formation. A statue was unveiled and there was a fireworks display. The next day, top Communist Party politicians, senior military leaders and scientists met at the local Sun Tzu academy, near the Sun Tzu memorial park, to analyze the works of the master. The celebration and the symposiums were intended to honor a national hero, whose teachings the party leadership believes are in keeping with their policies. Sun Tzu, a warrior who was also prepared to make peace, is the perfect centerpiece of a propaganda campaign.

It is likely that Sun Tzu lived in the 6th century B.C., in the realm of King Helü of Wu, whom he served as a successful general. Historians disagree over whether he was truly the sole author of the work "The Art of War," or whether later supporters added to it. Chinese traditionalists view these doubts as frivolous. For them, Sun Tzu is sacred, and his teachings indeed seem practically tailored to the world harmonization program favored by the Communist Party. The thin volume includes such sayings as "A leader leads by example, not by force," and "Supreme excellence consists in breaking the enemy's resistance without fighting." For several years now, almost every state visitor to China has been presented with a silk-bound copy of the book. German Chancellor Angela Merkel has two.

In 2009, Politburo member Jia Qinglin stressed that Sun Tzu's legacy should be used to promote "lasting peace and shared prosperity." Today, in the run-up to the 18th party congress, the famed strategist is often mentioned in reverential terms in political speeches. Sun Tzu is portrayed as what the Economist called a "peacenik," or even as a champion of human rights. One of the quotes used often is: "Treat the prisoners of war well, and care for them." And for China apologists like former German Chancellor Helmut Schmidt, who also defend the brutal crackdown on the Tiananmen Square protests, Sun Tzu represents everything that is far-sighted about China.

A Brutal Side

But soft power strategists come up empty-handed when theory collides with practice. Neighboring countries have experienced China's brutal side in recent months. Given this behavior, the Communist Party shouldn't be surprised to see the role of Chinese advisors being carefully scrutinized, from Angola to Azerbaijan, or about the growing suspicions of Western politicians, who must now fear Beijing's "punitive measures," be it at the Copenhagen Climate Change Conference, during trade conflicts or as a result of visits by the Dalai Lama.

Politicians and military leaders in the West know that the philosopher had more than only a soft side. "All warfare is based on deception," he wrote, and: "Bring war material with you from home, but forage on the enemy!"

In his alleged birthplace, Huimin, the Communist Party has dedicated an amusement park to the famed philosopher, the Sun Tzu Art of War City. But even in Huimin, the signs of westernization are unmistakable, from McDonald's restaurants to the Lady Gaga songs being played in discos and the film "Avatar" being shown in movie theaters. Hollywood is winning out over Chinese culture.

There is only one other superstar of Chinese history to combat the trend.

Qufu is less than 300 kilometers (186 miles) south of Huimin. But unlike Sun Tzu's alleged birthplace, Qufu is a tourist magnet, a UNESCO World Heritage Center with temples and monuments. In Qufu, everything revolves around one person: Master Kong, known in the West as Confucius.

Throughout the history of his country Confucius, a contemporary of Sun Tzu who allegedly lived from 551 to 479 B.C., was either deified or demonized. For revolutionary Mao Zedong, he was the ultimate reactionary. But since his rehabilitation in the 1980s, Confucius has once again been treated as a classic and as one of China's great figures.

The son of a minor nobleman, he lived in a grim era marked by the turmoil of war. The struggle against chaos became a matter close to his heart. He recognized that only the stabilization of social conditions provided a chance to unite the people by peaceful means.

According to a text in the "Collected Sayings," he was once asked how the teeming population could be "further benefited." "Make them prosperous," the master replied, "and instruct them." On another occasion, when he was asked to define kingcraft he said: "Food enough, troops enough and the trust of the people."

And if one of the three had to be spared? "First the troops," he answered. And then? "Food. But without trust a people cannot stand."

His teachings did not make him popular at first. The philosopher went from place to place, offering his services as a government advisor, usually without success. He once managed to become the justice minister of the princely state of Lu, but then he lost the position and wandered through the countryside. He did, however, manage to gather disciples. They carried on his legacy and wrote down his ideas from memory. The disciples were said to have kept watch over his grave for three years.

Using Confucius to Polish China's ImageStone guardians are scattered throughout the tall grass: lions baring their teeth, fierce birds of prey and elegant panthers about to pounce on potential troublemakers. A seven-kilometer wall encloses the site, Master Kong's modest burial mound in a cypress forest near Qufu. It was carefully restored, after members of the Red Guard knocked over steles and desecrated Confucius' final resting place during the Cultural Revolution.

Some 4 million pilgrims visit the site every year. Most of them are Chinese, some traveling in groups subsidized by the Communist Party. They go to see the Confucian Mansion, with its 463 rooms, and the temple with the Apricot Altar. They also visit the Confucius Institute, where the party promotes conferences about the great thinker.

Master Kong is useful to the party. His admonitions to obey rulers and honor one's elders are perfectly suited to the party's efforts to revive patriotic sentiments. His sayings about the "good" traditions that should be preserved, without completely closing one's mind to new things, could also hold appeal in the West. But it is also worth noting how selectively Confucian sayings are used in China. For instance, his saying that one should no longer serve an unjust ruler is never mentioned, not surprisingly, given the prevalence of corruption within the Communist Party.

China is using Confucius to polish its image in many areas. At the opening ceremony for the 2008 Summer Olympics in Beijing, extras appeared dressed as students of Confucius. China's leaders also use Master Kong to recruit students for scholarships worldwide, a form of campus diplomacy in which they have even outpaced the United States in countries like Indonesia.

A Massive Media Initiative in the Developing World

The Communist Party is spending $7 billion on a Third World media initiative. State television broadcaster CCTV recently launched a program based in Nairobi, as an alternative to CNN and the BBC, with mostly positive reports. The entire CCTV network reaches several hundred million viewers in more than 140 countries.

The Confucius Institutes, in particular, are attracting attention as ambassadors of the People's Republic, offering language courses and seminars to spread Chinese culture, calligraphy and cuisine. In most cases, they are affiliated with universities in the host countries. There are currently 358 institutes operating in 105 countries, with 13 in Germany alone.

Opinions differ on their work. China's critics see them as propaganda tools, Trojan horses working for the Communist Party. Proponents of China, on the other hand, point out that in most cases the host countries are involved in funding the institutes, which also gives them some control. Besides, they argue, Germany also engages in public relations with its Goethe Institutes.

Michael Lackner, a sinologist in the Bavarian university town of Erlangen and a member of the board of the local Confucius Institute, is not under the impression that the Communist Party directly influences the institutes, and most of his counterparts at German universities agree. "But, of course, Confucius Institutes are not there to level criticism against the People's Republic."

Jörg Rudolph, one of the directors of the East Asia Institute at the Ludwigshafen University of Applied Sciences, takes a completely different view. He points out that the institutes fall within the jurisdiction of Li Changchun, the member of the Standing Committee of the Politburo responsible for "ideology" and the chief censor of Chinese media. Rudolph also quotes a "Manual for the Director of the Confucius Institute" published in Beijing, which advises all professors to develop "hot love" for the institute and, with a "great sense of mission," to establish files on both personnel and students.

When Chinese human rights activist Liu Xiaobo was awarded the Nobel Peace Prize in 2010, it was largely ignored by the Confucius Institutes, as were the arrest of the internationally celebrated artist and dissident Ai Weiwei and the fiery speech against the Communist Party given by Liao Yiwu, who received the Peace Prize of the German Book Trade in mid-October. "Shouldn't our Master Kong have commented on that? Wouldn't he have been proud of it?" asked a blogger on the Chinese Internet, a forum for the counterculture in China, where there are more people online than in the United States.

China's Identity Problem

But while Master Kong is praised publicly and is being used to win the hearts of foreigners, he isn't exactly being admitted to China's Mt. Olympus, either, at least not on an equal footing with Mao. The giant statue of the philosopher, which stood for a short time last year diagonally across from the gate to the Forbidden City, with its enormous portrait of the Great Chairman, was moved to the inner courtyard of the Beijing National Museum. There was no official explanation.

An exhibition at the museum is just as puzzling as the relocation of the statue. Beyond a motley collection of exhibits and propaganda speech describing China's 5,000 years of glorious civilization, which supposedly was bound to lead to the communist revolution, it is unclear how China really sees itself and what it is meant to stand for, except perhaps crude materialism. In return for a substantial fee, the exhibit rooms at the National Museum were rented out to Louis Vuitton and Bulgari for brand presentations.

On the eve of the 18th National Congress of the Communist Party, China is portraying itself as a superpower caught between an excessive feeling of self-worth and whitewashed sense of inferiority. It comes across as an up-and-coming nation that could very well offer a lesson to the countries of the Third World with its economic efficiency, and yet is unable to offer an attractive alternative to the democratic West. "If China can't address the question of its identity, its rise will remain blind," says political scientist Zhang Shengjun of the Beijing Normal University.

Still, the flexibility of its Communist Party leadership remains astonishing. It's in full evidence, for example, during a visit to the aircraft carrier Kiev in Tianjin, a booming city of 13 million. In 1996, a Chinese company bought the giant warship, commissioned by the Soviet navy in 1975. Today it serves as an outing and party destination for the wealthy, who can afford to spend several thousand dollars for a night in the officers' quarters, which have been turned into suites.

With the exception of these rooms, the aircraft carrier has remained largely unchanged, including the fighter jets and weapons it carries. Twice a day, paying guests can attend a demonstration of what a Chinese aircraft carrier could really face -- just as sailors could do on board the Chinese Navy's first functioning aircraft carrier, which was commissioned in the port city of Dalian on Sept. 25.

It's show time in Tianjin, where guests are watching a live show called "Strike Force." A group of actors demonstrates the ship's defenses against a hostile power. Attackers hoist their way onto the warship from small speedboats, but they are repelled with gunfire and flamethrowers. The war on the high seas can only end with a Chinese victory -- or at least one would think so, until the actors appear after the half-hour spectacle, and it turns out that they are all Caucasian.

The operators of the show have turned over the action to foreign hands. Mirage Entertainment, a company based near Los Angeles, provides the team of acrobats. There is no fear of contact with the class enemy, who, in a real military conflict, would probably also be coming from the United States.

The American actors received their visas directly at the airport, which is not at all typical practice in China. The motto of these entertainers, some of whom worked on the "Terminator 2" film, is: "We make everything come true. Even your nightmares.

The Challenge for Beijing's New LeadersL: Chinese No Longer Bow to Autocratic Rule

By Bernhard Zand in Beijing

The time of autocratic rule has passed for China's Communist Party. At one time it was understood that the people would obey, and everyone would get rich in return. But economic success will no longer suffice. Now the Chinese are demanding freedom and security too.

There wasn't a word to be found in China last week about the story that had splashed across headlines for several days everywhere else in the world. Not a single mention was afforded the $2.7 billion (€2 billion) that the New York Times reported has been amassed by the family of outgoing Prime Minister Wen Jiabao during his time in office.

But there was a brief blurb in the "Quotable" section on page two of the state-run China Daily News that quoted Ma Yun, chairman of the China's largest e-commerce company, the Alibaba Group, saying: "A person should never try to possess both money and political power. ... The two things, when brought together, are like detonating dynamite."

Ma was reportedly commenting on a book named after a 19th century business tycoon, if anyone wants to believe that. In reality, the quotation highlights how even journalists bullied by the state are finding ways to skirt censorship and speak the truth -- and get the last word in on a prime minister they have had to praise for 10 long years before he retires.

It also shows how difficult it will be for the new leadership to continue ruling China as its predecessors have done. On Nov. 8, two days after the United States presidential election, the 18th national congress of the Communist Party begins. The fourth generation, to which Wen Jiabao and President Hu Jintao belong, will be succeeded by the fifth generation of new Prime Minister Li Keqiang and President Xi Jinping.

According to the party's plan, the change of power will remain within the unspoken contract that Mao Zedong made with the people over 60 years ago, and his successor Deng Xiaoping rewrote 20 years ago: We rule, you obey -- and we'll all get rich together, some sooner than others. In 10 years the sixth generation will take over, and in 20 years, the seventh generation will do the same.

Chinese People Demand More

But the course of history is unlikely to take such a direct route. The tasks ahead of the new leadership are different than those that Wen and Hu faced. China's economic growth, though still impressive at 7 percent, is slowly plateauing, while the demands of the Chinese have increased with prosperity. But above all, the once clear-cut balance of power between the leadership and the people has changed. For decades it was the people who feared the government, but now it is increasingly the case that the government fears the people.

Last week, thousands protested construction on a petrochemical plant with suspect filtering facilities for four days in Ningbo, one of China's richest cities. It was just one of countless "mass incidents" that have taken place in recent years. But the local government did something that would not have happened 10 years ago -- they stopped construction and promised to reconsider the factory. The time of unfettered autocratic rule -- which inspired wonder among foreign investors and was silently envied by Western politicians -- is over. Ecologically questionable projects, in particular, have become more difficult today than in some democratic countries, Western businesses are now beginning to admit.

Policy of Prosperity

In their growing confidence, the Chinese who are out protesting on the streets or making use of microblogs aren't leaving out any of the problems their swiftly developing nation suffers: the questionable food safety, the poor working conditions in many companies, violence and abuse in day care centers, the oppression of ethnic minorities and even the corruption and arrogance of their leadership.

When Vice President and designated new President Xi Jinping disappeared from the public eye without explanation for two weeks in September, China's bloggers commented on his silence with the same sarcasm they had used to address Wen Jiabao's rich clan last week. The subtext of many posts is that China's leaders are insulting the intelligence of their people with their Kremlin-like attitude. When the new autocrats take their posts next week, they will face an environment that isn't nearly as accommodating as it once was.

There is much to suggest that they will stick to the principle that their predecessors have since reformist leader Deng Xiaoping began the biggest economic boom of all time: In the last 10 years alone, the gross domestic product (GDP) of the nation quintupled, while the number of those who exist on less than $2 a day has gone down by 20 percent -- that's more than 250 million people. Fighting poverty is an instrument of human rights policy, they argue, and it's difficult to disagree, at least according to this scale.

Suffering From a Lack of Rights

But in the next 10 years, China can no longer be ruled according to the primacy of economic growth that strangles all resistance. "Many Chinese have become rich in recent years," explains economist Hu Xingdou. "But those that are still poor suffer mainly from a lack of rights." While the fourth generation was preoccupied with ensuring stability, he points out, the fifth generation needs to address social justice, including the rights of farmers and unions, the freedom of assembly and freedom of expression, and the establishing of the rule of law.

Powered by exports and the extension of the national infrastructure, China's growth might be impressive, says Hu, but what matters now is individual consumer clout. This can only be boosted by supporting individuals rather than once again raising state quotas and printing yet more money.

"Even problems that appear to have purely economic roots can in reality only be solved by political means," says writer Zhang Yihe, whose father -- like China's designated new leader Xi -- was one of the founders of the People's Republic of China. This also applies to the ever-widening prosperity gap as well as rural expropriation conflicts and the corruption that reaches from provincial authorities all the way to the Standing Committee of the Politburo, the party's leading body.

'What's the Point of the Wealth We've Amassed?'

But economic progress was not just the goal of China's leadership -- it was the goal of the entire world. And as the apprehensive attitude of Europe and the US to Beijing's growth figures goes to show, it still is. But these days, some in China are now less concerned about further growth and more interested in its political dividends.

Writer Zhang says she's hoping to see the new leadership make some bold moves. The first would be to relax press censorship, she says, pointing to the example of Burma. It should also beef up the rights of minorities and then take a cue from Taiwan and give elections some careful consideration, she adds. But what she really hopes to see it do is take the unprecedented risk of admitting that the Tiananmen Square massacre was a mistake and compensating victims.

"That shouldn't be hard!" she says. "What's the point of the wealth we've amassed?"

As Bill Clinton liked to say: "It's the economy, stupid." It's a mantra that seems to hold universally true, but not necessarily in China, where perhaps people have started to tire of it.

A group of Swiss environmentalists on Friday submitted a bill to the government aimed at reining in immigration in the name of curbing population growth and protecting the environment.

The Ecology and Population (Ecopop) first circulated a petition that garnered 120,700 certified signatures, thus easily passing the 100,000-threshold needed for the proposed law to be put to a referendum.

If Ecopop’s initiative clears other administrative and legal hurdles, it will be put to a national referendum, likely in 2015.

The group, which claims to be opposed to all forms of xenophobia and racism, insists Switzerland must limit immigration to avoid urbanisation and to preserve its agricultural land and breathtaking nature.

Using scientific arguments, Ecopop is meanwhile likely to alienate its usual green bedfellows on the left and could instead seduce the anti-immigration populist right, political analysts said.

Ecopop, which bases its ideas heavily on the theories of US biologist Paul Ehrlich, famous for his controversial 1968 book “The Population Bomb”, wants the Swiss government to commit to keeping population growth linked to migration below 0.2 percent annually.

This, it says, is “a level that is compatible with the sustainable preservation of natural resources.”

“Switzerland currently has one of the densest populations on the planet, with 480 inhabitants per square kilometre in ‘Mittelland’,” or central Switzerland, Ecopop leader Andreas Thommen told AFP, insisting “this development is not at all sustainable in the long-term.”

Switzerland, a country of some eight million people, counted 1.8 million foreigners at the end of August, which is 3.0 percent more than a year earlier, according to official statistics.

Ecopop blames a 2007 change in law making it easier for European Union citizens to settle in the country — 1.77 million of Switzerland’s foreign residents are from the bloc, with Italians, Germans and Portugese citizens accounting for the greatest numbers.

JERUSALEM — Prime Minister Recep Tayyip Erdogan of Turkey said on Friday that he planned to visit the Gaza Strip soon, a move that would significantly enhance the legitimacy of the Hamas-controlled Gaza government and antagonize the Palestinian Authority, Israel and the West.

Mr. Erdogan, who twice last year scheduled and then canceled visits to Gaza, did not offer specifics about the timing or agenda for such a visit, which he mentioned to reporters traveling with him to Ankara from Berlin, according to the Turkish newspaper Today’s Zaman. A Foreign Ministry official later said that the prime minister was simply expressing an “intention,” and that he wanted to visit “someday.”

Mr. Erdogan’s comments came nine days after the emir of Qatar became the first head of state to set foot in Gaza since Hamas took over in 2007, pledging $400 million for development projects, including housing complexes, road renovation and a prosthetics hospital. The crown prince of Bahrain was scheduled to visit the Palestinian enclave on Thursday but canceled at the last minute to avoid political repercussions, according to reports in the Arab news media.

A visit by the leader of Turkey, a huge power that is a member of NATO and a critical bridge between the West and the Islamic world, would make a much bigger diplomatic splash, paving the way for Egypt and other countries to expand direct, independent relationships with Hamas and further dividing the Palestinian leadership. Officials in the Palestine Liberation Organization and the Palestinian Authority, the Hamas rival that governs in the West Bank, had warned that the Qatari mission would set a dangerous precedent.

“We are against all these visits,” President Mahmoud Abbas of the Palestinian Authority said in an interview that was recorded before Mr. Erdogan’s comments and was broadcast on Friday night by Channel 2 News in Israel. “If they want to help Gaza, they should come through the authorities, through the legal authority.”

Both Turkey and Qatar have tried to help repair the rift between Hamas and Fatah, the dominant party in the West Bank, and some analysts suggested that Mr. Erdogan might make such reconciliation a focus if he visited. On the plane, according to Today’s Zaman, Mr. Erdogan said that he had once invited Mr. Abbas to accompany him to Gaza, and that “he was warm to the suggestion.” But Yasir Abed Rabbo, Mr. Abbas’s spokesman, balked at that notion in an interview on Friday night, saying: “Nobody can invite us to go to our own country. This is unacceptable.”

Turkey has been a strong ally and a significant donor to the Palestinian Authority, but also an important friend of Gaza. A Turkish-led flotilla’s attempt in 2010 to break Israel’s naval blockade on Gaza ended in an Israeli raid that killed nine people aboard the Mavi Marmara. That episode, in turn, led to the downgrading of diplomatic relations between Israel and Turkey, which in May indicted four high-ranking Israeli officials over their roles in the raid.

The renewed attention on Gaza comes at a critical time for the Palestinian Authority. Allies of Mr. Abbas are feverishly trying to garner international support for a bid to gain “nonmember state” status in the United Nations General Assembly. The Palestinian Authority is struggling with a financial crisis that led its prime minister, Salam Fayyad, to suggest this week that his cabinet could be dissolved and reformed. And municipal elections last month revealed growing rivalries within Fatah.

“It’s a slap in the face,” Ehud Yaari, a Middle East analyst for Channel 2 News, said of Mr. Erdogan’s plan. “The P.A. has been steadily losing support in the Arab world. It is losing its cohesion. They are losing ground.”

Alon Liel, who led Israel’s diplomatic mission to Turkey in the 1980s, said a visit by Mr. Erdogan would “dramatically change the image of the regime” in Gaza, and “deepen the grievances that the Israeli public has towards Turkey.” But he predicted that Mr. Erdogan would try to “compensate” the Palestinian Authority by helping with its United Nations bid.

“Erdogan feels closer to Hamas than to Fatah because Hamas is religious,” Mr. Liel said. “By definition, he will always prefer a religious leadership to a secular leadership. But it’s important for him not to humiliate Abbas. He will try to balance it.”

Ghassan Khatib, a professor at Birzeit University in the West Bank who formerly served as a spokesman for the Palestinian Authority, agreed, noting that Mr. Abbas had recently visited Turkey.

“If these countries are maintaining good official relations with the P.A. and the P.L.O. and at the same time giving support to Gaza, including going to Gaza, I don’t see that this is problematic,” Mr. Khatib said. “Giving support to Gaza can also be understood as an attempt to help this part of Palestinians that are facing especially difficult pressure.”

Subramanian Swamy, chief of the Janata Party, on Thursday accused Sonia Gandhi, the Congress Party president, and Rahul Gandhi, the Congress general secretary, of illegally purchasing a publishing company to gain ownership over land that it held, and loaning it money from party coffers.

Hours later, Mr. Gandhi, in a letter addressed to Mr. Swamy and circulated in the press, called Mr. Swamy's accusations "utterly false, entirely baseless and defamatory," and threatened to sue. "We are committed to pursuing all legal actions against the scandalous abuse evident in your so-called 'press conference,' " the letter said. A suit against Mr. Swamy could be filed in the next few days, one adviser said.

At the heart of the acrimonious battle, just the latest between Mr. Swamy and the Gandhi family, is a company called Young Indian. Mr. Swamy claims it was established by Mrs. Gandhi and her son to do what he called a "stinking deal" aimed at acquiring a publicly listed publishing company, Associated Journals. Associated Journals owned property in Uttar Pradesh and Delhi worth, he said, $295 million.

Beyond Mr. Swamy's allegations, public information about Young Indian, Associated Journals or the alleged land deals is limited, but the company appears to be a not-for-profit formed to revive two historic newspapers.

From the Ministry of Corporate Affairs' Web site comes this list of "Section 25" companies, or those formed "for the sole purpose of promoting commerce, art, science, religion and charity or any other useful objects." According to page 61, Young Indian was formed on Nov. 23, 2010, and lists its address as 5A, Herald House, Bahadur Shah Zafar Marg, in New Delhi.

Among other rules, Section 25 companies must apply any income or profits to promoting its objectives, and are forbidden to pay dividends to members.

Associated Journals stopped publication of two of its newspapers in 2008, long before Young Indian was formed. Qaumi Awaz, an Urdu newspaper founded by Mr. Gandhi's great-grandfather, Jawaharlal Nehru, and the English-language National Herald, which was edited by Mr. Nehru before he became prime minister, shut down in the spring of 2008.

At the time, loyal readers decried their closure, particularly because it came while Mr. Nehru's Congress Party was in power. "Sonia Gandhi's intervention would have saved the papers," wrote the blogger An Indian Muslim at the time. "Forever I will miss the newspaper that was once largely circulated in entire North India."

Young Indian planned to revive the papers, the Press Trust of India reported on Oct. 9. The news agency, citing Registrar of Companies documents, said the former Indian Express editor Suman Dubey was the signatory to the company and that the papers would be "set up under the guidance of top leadership of Congress Party," and that Sam Pitroda, a telecommunications industry entrepreneur, was also involved.

Rahul Gandhi's office had responded to the Press Trust of India's e-mail inquiries by saying that Young Indian "is a not-for-profit company and does not have commercial operations" and that it had "no intention of starting" any newspapers, and neither Mr. Dubey or Mr. Pitroda responded to questions.

However, Mr. Pitroda's official website, in his current capacity as adviser to the prime minister, displays a Hindustan Times article from May 2011 which reported that the Congress Party would soon be restarting the National Herald along with its Hindi edition, Navjeevan, and the Urdu edition, Qaumi Awaz.

Mr. Pitroda, the adviser to prime minister on public information, infrastructure and innovations, was roped in "to give a new look to the publications," the Hindustan Times said.

On Thursday, Mr. Swamy also alleged that the All India Congress Committee had given Associated Journals an unsecured loan of over $16 million, which he said was illegal because a political party cannot give loans for commercial purposes under the Income Tax Act.

Janardan Dwivedi, chairman, media department of the All India Congress Committee said in a statement Friday that the object of the Indian National Congress is the "well being and advancement" of the Indian people and that it has done its duty by supporting The Associated Journals "to help initiate a process to bring the newspaper back to health in compliance with the laws of the land". The support, the statement says, was in the form of "interest free loans from which no commercial profit has accrued to the Indian National Congress."

An income tax lawyer, who asked to remain anonymous because of a conflict of interest, said that a loan such as Mr. Swamy had described would be illegal according to Section 13 A of the Income Tax Act, which speaks of special provisions made for the income of political parties. Income of political parties is exempted from taxation, he said, however the money thus exempted is not meant to be used for purposes other than those of the political party.

Phone calls to the Registrar of Companies went unanswered, as did calls to the Ministry of Corporate Affairs, the Securities and Exchange Board of India and the offices of Mr. Gandhi and Mr. Pitroda.

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Outsourcing Giant Finds It Must Be Client, Too

By VIKAS BAJAJIHT

NEW DELHI — Every three months, India’s prime minister, Manmohan Singh, meets with a special panel assigned the ambitious task of figuring out how to produce 500 million skilled workers over the next two decades.

The panel is a cross section of India’s power elite, including many of the usual figures like the education minister, the finance minister and the former chief executive of the country’s biggest software outsourcing company. Then there is a more curious choice: Manish Sabharwal.

Mr. Sabharwal runs TeamLease, a Bangalore-based agency that has created thousands of jobs by fielding temporary workers for companies in India that want to expand their work force while skirting India’s stringent labor laws, which businesses say discourage the hiring of permanent employees. Many labor leaders and left-leaning politicians accuse him of running the nation’s largest illegal business.

He does not completely disagree.

“We should not exist,” Mr. Sabharwal, a 40-year-old graduate of the Wharton School of the University of Pennsylvania, said about his company, which has 60,000 employees. “The genius of India is to allow us to exist.”

What Mr. Sabharwal calls “genius” others would call dysfunction, or at the very least, an elaborate workaround, or temporary fix.

India is known the world over as a prime innovator of outsourcing for foreign companies, which take advantage of its cheap, English-speaking labor force. Less well known is the extent to which Indian companies outsource their own jobs within their own country.

Walk into any of India’s shining new shopping malls that sell expensive brands, like Gucci and Satya Paul, and many of the store clerks, janitors and security guards will be on the payrolls of outsourcing companies, not those of the owners of the mall or stores in it, executives say.

The practice highlights a fundamental tension between India’s socialist past and a new freewheeling, private sector that is increasingly powering the economy while chafing at what many companies say are laws so protective of workers that they blunt hiring and stifle growth.

Mr. Sabharwal provides a backdoor way around the old system in a manner that is not without controversy. He fills thousands of jobs at a cost that allows many companies to continue to function, and even helps retrain India’s large population of young job seekers — half of Indians are 25 or younger — who are undereducated and ill prepared to enter the labor force.

In that highly competitive environment for jobs, Mr. Sabharwal supplies workers who are paid as little as half of what permanent employees earn and who usually receive few benefits. Though technically temporary, many of them keep their status at the same companies for years. In India’s nascent industrial hubs near New Delhi, autoworkers are increasingly protesting the use and treatment of the kind of contract workers Mr. Sabharwal supplies, who lack job security.

But the reason Mr. Sabharwal has thrived, he and others say, is because India needs him. The nation’s complex web of federal and state labor laws intended to protect permanent workers are so onerous that few employers want to hire them, they say.

Those laws cover virtually every aspect of employment — how workers are hired, what they are paid, how many hours they can work and whether they can be fired. Factories employing 100 or more workers are not allowed to lay off employees without the government’s permission.

The laws are unevenly enforced, but many businesses still consider them so cumbersome that they find it worthwhile to have somebody else manage the “compliance issues,” which is why TeamLease also employs about 60 people in its regulatory division who do so.

“India, compared to even European countries, has more restrictive labor laws,” said Sean Dougherty, a senior adviser at the Organization for Economic Cooperation and Development who has studied India’s labor market.

Mr. Sabharwal has provided a way around what many see as those daunting obstacles to growth, at least for now. But even he argues that his workaround business model is not sufficient for India to bolster manufacturing — still just 16 percent of the economy — and to create new jobs for the 12 million people who enter the labor force every year.

He is among the first to acknowledge that many workers suffer because the workaround model does not itself create enough good jobs. But it is offering an opportunity for growth where the old model does not.

“For business, labor laws are a thorn in the side, not a dagger in the heart,” Mr. Sabharwal said. “People who are hurt the most are people who need to get off farms, labor market outsiders, people from small towns, the less educated, the less skilled.”

An Unlikely Entrepreneur

TeamLease is not the business Mr. Sabharwal set out to open.

During the 1970s, when he and his family spent four years in Washington, a question kept nagging him: “Americans weren’t really smarter than us, but why were they richer than us?”

It was a timely question because India’s economy then was turning increasingly socialist and state-directed. Policy makers nationalized large banks, raised the highest tax rate to 97.5 percent and required factories with 300 or more workers to get government permission before layoffs, a threshold later reduced.

Mr. Sabharwal’s family of civil servants and teachers believed in India’s socialist policies. His father, who worked for a time at the Indian Embassy in Washington, was a solid member of the establishment.

“We had arguments about government versus private sector, growth versus facilities in the government,” his father, Mahendra, said.

The younger Mr. Sabharwal defended the private sector, which he argued was more effective than the government and the reason for America’s greater riches. He became convinced that he could have a bigger impact on India as an entrepreneur than by joining the civil service as his father had done.

He wanted to start a business. But first, he said, he had to learn how a free-market economy worked. So, with his grandparents paying the tuition bill, he went to the Wharton School. “I wanted to go out and understand how business was done without regulatory connections,” he said.

At Wharton, professors and friends say, he worked with single-minded focus on a business plan — not for TeamLease, but for a private insurance company, India Life, which he hoped would take on the state monopoly. But back in India, policy makers were not yet willing to introduce competition in the insurance industry. He hit a brick wall.

Then one day an Indian manager at Siemens, the German company, complained to him about the tedium of processing payroll and benefits paperwork. Mr. Sabharwal decided to turn India Life into an outsourcing company to do that work.

In 2001, Hewitt, an American company, acquired India Life. A year later, Mr. Sabharwal and his partner, Ashok Reddy, started TeamLease to solve another frequent problem clients complained about: hiring and managing employees in the thicket of India’s complex labor laws.

Work in the New Economy

Today, one of TeamLease’s biggest clients is Whirlpool, the American appliance maker. In 1997, a few years after Whirlpool arrived in India, it hired hundreds of salesmen and sent them to independent retail stores to sell washing machines, refrigerators and air-conditioners to middle-class Indians who had never bought such appliances before. But soon executives were overwhelmed trying to keep abreast of changes in labor laws and various minimum-wage rules in India’s 28 states.

So Whirlpool began outsourcing its sales staff, which has since grown to 1,850 people — first to a staffing agency called Adecco and later to TeamLease. Excluding 250 people who work at the company’s own stores, most of its sales workers are employed by TeamLease, which handles their wages, commissions, health care and retirement savings.

Indian executives at Whirlpool, which sells appliances in 130 countries, said India was perhaps one of only a few places where an outside company managed its sales staff.

“Having a guy on your payroll comes with a lot of responsibility,” said Hardesh Chojher, general manager of marketing at Whirlpool in India. “For example, each state has its minimum wage, which is revised every three months.”

Many employers in India rely on contract hiring agencies like TeamLease, though many are reluctant to say so publicly. Indeed, foreign companies that come to India often hire law firms and staffing agencies before hiring anyone else.

Nearly one-quarter of India’s industrial laborers worked on contracts in 2007, up from just 16 percent in 2000, according to government data. The share of temporary workers in India’s large services sector is believed to be even higher, though the government does not collect that data. Even government agencies increasingly rely on temporary employees.

Unlike in the United States, where temporary workers are rotated between job sites, in India contract workers often stay in some jobs for years. Arun Gour, 25, joined Whirlpool’s sales team as a contract worker about four years ago in Yamunanagar, a town 120 miles north of New Delhi. After smashing sales records, he was promoted this year to a job at Whirlpool’s Indian headquarters in Gurgaon, a booming city just south of New Delhi, where he collects and processes sales data from around the country.

Mr. Gour makes about 18,000 rupees, or $345, a month, a good salary by Indian standards, and he has access to a government-run retirement-savings plan and health insurance. He said he hoped one day to be promoted onto Whirlpool’s payroll so he could earn more money and receive better benefits.

“I am very proud that I am providing for my family,” Mr. Gour said, speaking of his wife and mother, who still live in Yamunanagar. “I have friends from college who are looking for work. Some of them have master’s degrees and they are earning 6,000 or 7,000 a month,” or about $115 to $134.

A Flawed System

Not everyone is as happy. About 30 miles south of New Delhi along the dusty highway to Jaipur lies Manesar, one of India’s new industrial boomtowns. There, more than 100,000 workers — about 30 percent of them on contracts — toil in the factories of Indian and multinational companies like Maruti Suzuki, Videocon, Mitsubishi and Honda.

While the factories have been profitable and have provided new jobs, both labor and management are frustrated. Workers complain about the expanding ranks of contract workers who are paid a fraction of what regular employees earn and receive few benefits, and they say that there are not enough jobs to begin with.

Corporate executives say that India’s restrictive labor laws force them to hire and train contract workers who feel no loyalty to them, and that finding skilled workers is difficult.

In early October, these frustrations boiled over when 2,000 workers at Maruti Suzuki, India’s largest car company, went on strike and shut down a plant that produced as many as 1,200 cars a day. The spark for the strike was that the company had not immediately taken back 1,200 contract workers who supported 1,000 regular employees during a previous dispute, underscoring the vulnerability of the temporary hires.

“Everyone aspires to become a permanent employee,” Rajbir, a 23-year-old contract worker who only uses one name, said while he camped with other striking workers outside the factory gates. He said he worked on a contract basis because he needed the money and had few other options. “Wherever we go, there will be similar problems,” he said.

The chairman of Maruti Suzuki, R. C. Bhargava, disputed the workers’ allegations, but he acknowledged that Indian companies hired too many contract workers. He said policy makers should give companies more flexibility in laying off workers and, in exchange, force them to offer workers generous unemployment insurance. “This conflict situation doesn’t help anybody,” Mr. Bhargava said.

In October, the Indian government proposed letting ailing factories lay off workers if they offered unemployment insurance. But the provision would apply only to companies in a few new manufacturing zones. Analysts say policy makers are unlikely to consider broader reforms in the next few years because there is a deadlock between advocates for change like Prime Minister Singh and lawmakers who believe that any weakening of laws would hurt workers.

In the meantime, many economists assert that India’s labor laws will continue to restrict the country’s job growth, at least in the formal sector. While that is bad news for India, it is a circumstance that continues to allow Mr. Sabharwal’s business to thrive. Last year it grew by 10,000 employees.

His company had $160 million in revenue last year and is growing about 20 percent a year, executives said. Last year, it acquired the Indian Institute of Job Training, which runs 120 centers that provide courses in English, bookkeeping, computer applications and other subjects. TeamLease also plans to build 22 community colleges in the western state of Gujarat.

Mr. Sabharwal said his business could grow even faster if the government changed the labor laws because that would create more jobs and increase demand for job training. But he is not letting government inaction hold him back.

“If you wait for all the lights to be green in India,” he said, “you will never leave home.”

Hours later, Mr. Gandhi, in a letter addressed to Mr. Swamy and circulated in the press, called Mr. Swamy's accusations "utterly false, entirely baseless and defamatory," and threatened to sue. "We are committed to pursuing all legal actions against the scandalous abuse evident in your so-called 'press conference,' " the letter said. A suit against Mr. Swamy could be filed in the next few days, one adviser said.

At the heart of the acrimonious battle, just the latest between Mr. Swamy and the Gandhi family, is a company called Young Indian. Mr. Swamy claims it was established by Mrs. Gandhi and her son to do what he called a "stinking deal" aimed at acquiring a publicly listed publishing company, Associated Journals. Associated Journals owned property in Uttar Pradesh and Delhi worth, he said, $295 million.

Beyond Mr. Swamy's allegations, public information about Young Indian, Associated Journals or the alleged land deals is limited, but the company appears to be a not-for-profit formed to revive two historic newspapers.

From the Ministry of Corporate Affairs' Web site comes this list of "Section 25" companies, or those formed "for the sole purpose of promoting commerce, art, science, religion and charity or any other useful objects." According to page 61, Young Indian was formed on Nov. 23, 2010, and lists its address as 5A, Herald House, Bahadur Shah Zafar Marg, in New Delhi.

Among other rules, Section 25 companies must apply any income or profits to promoting its objectives, and are forbidden to pay dividends to members.

Associated Journals stopped publication of two of its newspapers in 2008, long before Young Indian was formed. Qaumi Awaz, an Urdu newspaper founded by Mr. Gandhi's great-grandfather, Jawaharlal Nehru, and the English-language National Herald, which was edited by Mr. Nehru before he became prime minister, shut down in the spring of 2008.

At the time, loyal readers decried their closure, particularly because it came while Mr. Nehru's Congress Party was in power. "Sonia Gandhi's intervention would have saved the papers," wrote the blogger An Indian Muslim at the time. "Forever I will miss the newspaper that was once largely circulated in entire North India."

Young Indian planned to revive the papers, the Press Trust of India reported on Oct. 9. The news agency, citing Registrar of Companies documents, said the former Indian Express editor Suman Dubey was the signatory to the company and that the papers would be "set up under the guidance of top leadership of Congress Party," and that Sam Pitroda, a telecommunications industry entrepreneur, was also involved.

Rahul Gandhi's office had responded to the Press Trust of India's e-mail inquiries by saying that Young Indian "is a not-for-profit company and does not have commercial operations" and that it had "no intention of starting" any newspapers, and neither Mr. Dubey or Mr. Pitroda responded to questions.

However, Mr. Pitroda's official website, in his current capacity as adviser to the prime minister, displays a Hindustan Times article from May 2011 which reported that the Congress Party would soon be restarting the National Herald along with its Hindi edition, Navjeevan, and the Urdu edition, Qaumi Awaz.

Mr. Pitroda, the adviser to prime minister on public information, infrastructure and innovations, was roped in "to give a new look to the publications," the Hindustan Times said.

On Thursday, Mr. Swamy also alleged that the All India Congress Committee had given Associated Journals an unsecured loan of over $16 million, which he said was illegal because a political party cannot give loans for commercial purposes under the Income Tax Act.

Janardan Dwivedi, chairman, media department of the All India Congress Committee said in a statement Friday that the object of the Indian National Congress is the "well being and advancement" of the Indian people and that it has done its duty by supporting The Associated Journals "to help initiate a process to bring the newspaper back to health in compliance with the laws of the land". The support, the statement says, was in the form of "interest free loans from which no commercial profit has accrued to the Indian National Congress."

An income tax lawyer, who asked to remain anonymous because of a conflict of interest, said that a loan such as Mr. Swamy had described would be illegal according to Section 13 A of the Income Tax Act, which speaks of special provisions made for the income of political parties. Income of political parties is exempted from taxation, he said, however the money thus exempted is not meant to be used for purposes other than those of the political party.

Phone calls to the Registrar of Companies went unanswered, as did calls to the Ministry of Corporate Affairs, the Securities and Exchange Board of India and the offices of Mr. Gandhi and Mr. Pitroda.